Naked Option

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August 25, 2024 3 min read Definitions
Naked Option: Definition, Risks, and Examples
Finance Investments Trading Naked Option Options Trading Derivatives Financial Risk Investments
A naked option refers to an options contract for which the seller or buyer does not hold the underlying security. This concept in options trading entails significant risk, as the writer of the naked option could be exposed to substantial losses if the market moves unfavorably.
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