naked option |
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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.
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naked option is in the Commodities & Precious Metals Trading, Currency Trading, Disaster Planning & Risk Management, Investing and Securities & Futures Trading subjects.
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