What is short selling? What about naked short selling?

Answer 1

A short sell is basically selling shares you don't have. You'd borrow the shares from someone else, sell them, and buy them back later. Generally, an investor hopes the stock price will go down...
Instead of buy low, sell high, its sell high, buy low.

Naked shorting is selling nonexistent shares. Instead of borrowing shares from another investor first, you sell first and hope someone will let you borrow their shares later.

Answer 2

Short selling is when you commit to sell stock when you don't own the shares.

Example: You offer to sell someone 10 shares of Blah,Inc. for $10 a share. You are hoping at the point of sale that you can buy 10 shares of Blah,Inc for less than $10 a share. It does happen and it can work, but it is dangerous, because if the price goes UP, then you will lose money when you have to exercise the option.

Naked short selling is illegal. You are short selling shares that have not be determined to exist. For example, if you are not making any attempt to get hold of the stock.

Answer 3

Short selling is when you sell a pair of shorts on the street-corner or someplace. Naked short selling is when those were the only shorts you had on.

Answer 4

just to add to what's already been said,

most brokerage firms will supply you with the shares.

you need to know how to buy to cover and about short interest