Naked shorts that are a fail to deliver. Retail is 3 days TCMarket makers have special exemptions from the rules: they are allowed to carry a naked short for up to twentyone trading days before they have to borrow a share. When the share is not borrowed in the allotted time and a buyin does not occur, and they rarely do, the naked short becomes a failtodeliver (of the borrowed share). This adds to the downside of a stock SP because the share is actually not real and the short monies that was allotted is not used to cover. It is 100% profit with no risk at all. The stocks most frequently targeted are those of emerging companies who went to the stock market to raise startup capital.