> You can get arbitrarily high amounts of shorting without any naked shorts. That's why I said "Interestingly, in both cases the short interest can be greater

> You can get arbitrarily high amounts of shorting without any naked shorts. That's why I said "Interestingly, in both cases the short interest can be greater than 100%" But in the situation you're describing the total number of shares on the market is still equal to float. If we altered your example to have naked shorting it would be: B sells a share it hasn't borrowed to C, A sells a share it hasn't borrowed to D. The total number of shares that can now be traded is equal to the float + 2. Hence the claims of 'counterfeit shares' which is not a great description. Naked shorting can only be done by market makers. The argument is that it helps to create liquidity and that these actors will have the ability to later borrow the shares without issue. The problem is that, as I understand it, there are not strict rules dictating when they must actually borrow the shares to back the shares that they sold short. There are some indications that this has happened with GME. For example Michael Burry said in a now deleted tweet[0]: "May 2020, relatively sane times for $GME, I called in my lent-out GME shares. It took my brokers WEEKS to find my shares. I cannot even imagine the sh*tstorm in settlement now. They may have to extend delivery timelines. #pigsgetslaughtered #nakedshorts" [0] https://web.archive.org/web/20210130030954/https://twitter.com/michaeljburry?lang=en https://web.archive.org/web/20210130030954/https://twitter.c...