Shorting is nothing more than betting the stock will go down.
Normal shorting is putting a SELL order in with a broker on a stock you don't have in your portfolio. The Broker then has to place the order and "borrow" those shares from some source. If the stock goes down then you "BUY" the shares and you make money. The Broker returns the shares and we are back to square one and hopefully you made a profit.
Naked Shorting is "skipping the borrowing" part. In essence it can place more shares of stock in play than are available. It causes BIG players to be able to control the market without alot of the risk because they can sorta wrest control from the legal shareholders and put the stock in play.
Toss in the removal of the uptick rule, and the piling on by these vultures is that much easier. Interesting to see Morgan Stanley’s CEO crying to the SEC yesterday, when his stock was pounced on, bc MS traders probably do it all the time