Naked Call

Naked Call

A call option position held by a writer who does not hold a long position in the stock on which the call has been written. Sometimes referred to as an "uncovered call."

Notes:

Naked options are very risky. Profits are huge if the underlying asset moves in the direction desired by the investor. But the losses are big if the underlying asset moves in the opposite direction.

See also: Call Option, Long, Naked Option, Naked Position, Naked Put, Naked Shorting