Naked Option

What Does Naked Option Mean?
An option position where the buyer or seller has no underlying security position.

Investopedia explains Naked Option
Naked options are very risky. Profits are huge if the underlying asset moves in the direction desired by the investor. On the other hand, a writer of a naked option can lose big if the underlying asset moves in the opposite direction.

Filed Under: Derivatives, Options

Related Terms

Call Option
Naked Call
Naked Position
Naked Shorting
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