naked option definition

  • noun:
    • An opening transaction in an option once the underlying asset is certainly not owned by the buyer composing the possibility. If a stock by which these types of an investor features written a call choice is after that called by the option holder, the buyer must buy shares in the market for distribution and it is therefore caught nude. Also called uncovered option.
    • a put or call option for which the vendor or buyer has no underlying security place

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