"naked shorts" is short for "Naked Short selling" or NSS, shorting the stock without properly borrowing the shares, an illegal practice often carried out offshore to avoid SEC enforcement... used to "sink" a penny stock as it moves down, by "diluting" the apparent shares in the market. NSSers may end up having to cover at a loss when the stock moves up and/or their positions are called in by a reverse split. etc....dirty business.
Never put SL on this kind of stock!!!