Financial Crisis Buzzwords
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Definition: Calm down. Naked shorting isn't really naked 鈥� actually, it would make more sense to call it invisible because a naked short is a trade that doesn't exist. Short sales occur when someone borrows a stock from its owner, sells it, buys it back at a lower price, and pockets the difference. Naked shorts occur when the short seller doesn't bother to borrow the stock before he sells it.
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