naked option

Definition

Uncovered option for which the buyer or seller does not own the underlying asset. It is either a long position by the writer of a call option (right to buy) or a short position by the writer of a put option (right to sell). Naked options carry a chance of huge profit as well as of great risk, depending on the market's direction. Opposite of covered option. Also called uncovered option.


Nearby Terms

Search volume for naked option

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z