naked option (Meaning)
Wordnet
naked option (n)
a put or call option for which the seller or buyer has no underlying security position
Synonyms & Antonyms of naked option
No Synonyms and anytonyms found
naked option Sentence Examples
- The trader purchased a naked option, exposing themselves to unlimited potential loss.
- Naked options are often used by experienced traders who have a high tolerance for risk.
- When buying a naked option, the buyer is responsible for 100% of the option's premium.
- Naked options can be either calls or puts, depending on the trader's desired position.
- Selling a naked option involves selling an option without holding any corresponding underlying asset.
- The maximum profit potential on a naked option is limited to the premium received.
- Naked options are highly speculative and can result in substantial losses if not managed properly.
- Traders should carefully consider their risk tolerance before trading naked options.
- Buying a naked call option gives the buyer the right, but not the obligation, to buy an underlying asset at a specified price.
- Selling a naked put option gives the seller the obligation to sell an underlying asset at a specified price if assigned.
FAQs About the word naked option
a put or call option for which the seller or buyer has no underlying security position
No synonyms found.
No antonyms found.
The trader purchased a naked option, exposing themselves to unlimited potential loss.
Naked options are often used by experienced traders who have a high tolerance for risk.
When buying a naked option, the buyer is responsible for 100% of the option's premium.
Naked options can be either calls or puts, depending on the trader's desired position.
