You are correct. The naked shorts will not have the stock in inventory and therefore will have to account for those. Very similar to the dividend forcing naked shorts to account for the shares. The way the whole sale market makers like NITE make their money is by not delivering the shares by a 3 day settlement date and continue to move the shares from account to account as not to report. Naked Shorting= Promise to deliver at a higher price while never owning the stock, then picking up stock on the bid, and making the spread with impunity. We will see a short squeeze because the flood gates are going to open and even the market makers are not going to be able to hold NTEK DOWN!!!!! And yes naked shorting is not allowed but the big boys find a way to make it happen.