Naked shorts are not impossible, especially if you're talking about naked call options. They're comparatively rare (being illegal just means you get fined if yo

Naked shorts are not impossible, especially if you're talking about naked call options. They're comparatively rare (being illegal just means you get fined if you get caught, it's really "not that serious" for a big player), and small timers aren't allowed to participate, but they're not impossible. An even bigger point than that is that the short doesn't necessarily have to be naked in the legal sense for you to fail to deliver, especially when a security has gone completely Texas like GME has. This situation is rare. Halting all trades is very scary for all parties involved. It's way worse for just about everybody than asking brokerages to have 100% collateral is.