FYI - complaint to ASIC re short selling, page-46

Mighty, you have it wrong. It's true derivative product can increase total amount of risk associated with sp beyond that implied in number of issued shares.

But in your example, your shares have been sold. Ownership has passed. If your broker did not take adequate risk management measures (ie mark to market security) for the call option, I can assure you that you would likely never get them back if sp went up enough.