The way togo short is by selling securities you do not presently own (Duh !!)

OK so when you sell short through an automated system, you actually mighty be on an honor system. And if you simply say Sell from a long position then you can go short.

I beleive that TD has protection and will not let you sell LONG if the shares are not in position.

Perhaps SCOTT does not.  I believe that in March or April Goldman Sachs was fined for this exact offense of relying on honset customers poperly indicating a "long" sale vs. a "short" sale while customers sold short even though they "clicked" it as selling a long position.

Obviously Scott might not wish to announce this weakness in thier system so they simply block all transactions in a stock that they feel might be experiencing naked shorting and require that teh customer talk with a rep tp transact in the security.

If you are going long(er)  no problem. If however, you are going short then they say sorry you don't own these shares and you can't sell them.

To me this news about Scott stopping on-line trades in PTSC was good-news. Rememeber the naked shorters are professionals and can easily outsell naked what any of us can purchase legitimately.