4 ms·

I'd say the difference is that they're doing it over and over.

• kebman 6y ago
  Sorry, I got it wrong, so I tried to delete my comment. Leverage is when you're loaned money, so you can buy more stocks than you could with just your own money, with certain automated stops as security against loss for the creditor (such as margin calls). It's a deal between you and a creditor, and the stocks purchased remain real. A naked short, on the other hand, is when a broker is exploiting the system to make it seem like there are more shares available than there actually is. Thus when people buy a non-existing share, the money is deposited for a short time, but the purchase “bounces,” which again can create slippage and volatility (fake “liquidity”), depending on how the system is set up.