[southerndrift]

Does this mean that using those brokers means that I 'nakedly' own those shares? I.e. if I actually pick a successful share and the price explodes, the shorter or the broker cannot buy it back and I end up owning nothing?

With all the people shorting Tesla, who will own Tesla if Tesla succeeds and the price explodes?

[manigandham]

No, if you short shares and the price rises too much, your account will go into a margin call and your broker will liquidate all of your positions. All brokers have complex risk management to protect their interests.

In the extremely rare case that you end up with a negative balance, the broker will cover the shares and collect the money from you like any other debt.

[southerndrift]

But the broker doesn't necessarily lend out the shares to his own clients. And even if he does, how does he get back the shares from the person who went long? The broker will have to buy other shares. But if the price of those shares is exploding, who is willing to sell them?