Short selling naked involves illegally selling shares that do not exist. It is generally necessary for investors to determine whether a stock can be borrowed before selling it short. There is a possibility that short interest may exceed the number of outstanding shares when investors short a stock without confirming that the shares can be borrowed.
As a result of a short squeeze, naked short selling essentially creates phantom shares, increasing liquidity in the shorted stock. A short squeeze prevents short-sellers from delivering shares they shorted if they haven't borrowed the shares they shorted.
Gamma squeezes differ from short squeezes because they involve the options market. Due to open options positions on the stock, gamma squeezes force investors to buy shares. When the stock price rises, naked call option sellers have a greater potential loss. The naked call can be converted into a covered call at any time before the option is exercised by purchasing the stock.

A gamma squeeze and a short squeeze are distinct market phenomena, though both involve rapid price increases driven by investor activity.

A short squeeze occurs when investors who have shorted a stock (betting its price will fall) are forced to buy back shares as the price rises unexpectedly. This buying pressure pushes prices even higher, creating a feedback loop that further escalates the stock price.

A gamma squeeze, on the other hand, happens in options markets. When traders buy call options, market makers who sell these options must hedge their positions by purchasing the underlying stock as its price rises, leading to more demand. As prices continue climbing, the hedging needs increase, accelerating the price movement. While both scenarios drive prices upward, gamma squeezes are more technical, driven by options dynamics.