Sounds very logical. Sounds like something that SHOULD happen. But I notice you said "need" to be covered. Please educate me on exactly who guarantees that such shares WILL be "covered". I understand that "the people shorting and creating those shares" would be the ones "needing" to cover. I also understand that those same people aren't necessarily the most honest ones around, based on all the anti-shorters views of them. So WHO EXACTLY will GUARANTEE that those shares are covered? There is an FDIC that guarantees bank deposits. Up to a certain amount. And it's a government agency (FEDERAL). WHO EXACTLY guarantees that "air shares" WILL be covered? Is it the same SEC that allows the naked shorting process in the first place? THIS is why I can see new investors possibly hesitating to invest based on the constant (and unproven) "naked short" stuff.

Do I think there may be naked shorting? Yes. Do I think it's wrong? Yes. Do I think the problem is as large as some believe? Not necessarily, but possibly.

Assume a massive success by IPIX. $40 pps. SOME of those nice naked shorters might be unwilling or even unable to "cover". In such a case, how would those "air shares" be separated from "real shares"? And EXACTLY who would be covering in such a case? And what guarantee is there that "the shares" would then be covered?

Assuming the naked short problem is as large as some believe then yes, brokerages would be intimately involved in this. Even in that case, is there a specific guarantee that "covering" of all shares would happen? I can't see it, but feel free to explain.