RE:Protecting Your Shareholdings From Being Shorted....
In the context of short selling, that is simplistic. There are naked shorting & shorting "against the box" by insiders & others, etc. The hedge funds are very sophisticated in what they do. According to the Ontario Securities Commission's reporting : "... A short sale is generally considered to be the sale of a security that the seller does not own or will not be able to deliver on the settlement of any sale. It involves selling securities at the current market price in the expectation of being able to purchase later at a lower price or being able to cover the short position when securities owned by the seller become available. The selling of securities which are not owned can be risky. Unless the short sale is otherwise "covered" or "hedged", a short seller can lose a potentially unlimited amount on the sale if the price of the particular share rises unexpectedly. A failed trade occurs when the seller (whether short or long) fails to deliver securities to the buyer when delivery is due, generally three trading days after the trade (T+3). Settlement of a short sale must generally occur on T+3, which means that a short seller needs to purchase the security to cover the sale on the same trading day, unless the security can be "borrowed" from another source. ...There is no legal definition of "naked short selling" in Canada. The concept appears to have different meanings in different jurisdictions. In some jurisdictions, it refers to short selling without borrowing in time to make delivery on T+3. In others, a "naked" short sale is viewed as a sale where the seller does not own, and has not borrowed or made arrangements to borrow, securities at the time of the sale. A "covered" short sale is generally considered to be a sale of a security that has been "borrowed" by the seller at the time of the sale. Others have taken a wider interpretation and would include as a "covered" short sale any sale of a security where the seller has arranged or taken steps to borrow the security at the time of the short sale, but will only take delivery of the borrowed security after the sale has been executed. Short selling is a legitimate trading practice which contributes to market liquidity, efficiency and price discovery. For example, it allows market makers to provide liquidity even when they do not hold a particular security, which helps to stabilise prices. Short selling can contribute to more efficient pricing of securities by moderating both price increases and declines. Short selling can also be an important part of an investor's hedging and risk management strategy. While fraud and manipulation are not concerns peculiar to short selling, short selling activity can be detrimental when short sellers engage in manipulative activity. Selling pressure spurred by fear and uncertainty may contribute to mispricing and destabilized markets..."