Can someone please tell me what is, exactly, naked short selling?

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EthanR answered a question in Latest News.
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EthanR answered one year ago …

The definition, according to investopedia is:

The illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But due to various loopholes in the rules and discrepancies between paper and electronic trading systems, naked shorting continues to happen. See link below for more details.

http://www.investopedia.com/terms/n/nakedshorting.asp

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