A naked option refers to an options contract where the buyer or seller does not hold the underlying asset associated with the option. This type of position can expose the writer to unlimited losses or substantial gains.
An uncovered option, also known as a naked option, refers to an option contract where the writer of the option does not hold the underlying security or the sufficient cash to cover the position, making it a high-risk strategy.
Writing naked refers to a highly speculative strategy where an options trader sells options without holding the underlying security, exposing them to significant risk.
