There are the covered and the naked shorts and difference is between nite and day. For example, I mentioned UNXL to a friend of mine. He read about it and bought 10,000 shares at $18.00. he sold futures at $22.50 for $1.50 premium and pocketed $15,000. His study convince him that the stock is good but he plays the short-run game that he expects to net him$60,000. The reports, however, do not differentiate between the naked and the covered. He sold what it appears short and this is how it is recorded. Not bad investment and return for a couple of months. He expects fully that somebody will exercise. In the mean time they are all shorts and he is very happy for his profit.