Naked Put

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Naked Put

A short position on a put option without having enough cash or cash equivalent to buy the underlying asset should the holder exercise the option. An investor with a naked put makes a gain or loss depending on the movement of the underlying asset. This position is quite risky and can result in large losses should the underlying asset not move in the investor's preferred direction. Naked puts are also called uncovered puts. See also: Covered Options.
References in periodicals archive ?
com, as well as a major upgrade to its covered call screener, with the addition of naked puts, credit spreads, and intraday updates.
The Advanced Options Screener features a revamped interface with more filters and criteria aiming at helping users identify the best covered calls, naked puts and credit spreads.
Written by a successful stock options investor of eighteen years' experience, Covered Calls and Naked Puts is a straightforward guide to low-risk opportunities in the options market.
You will find proven successful strategies on call and put plays, leaps, covered calls, naked puts and combinations.
If you are comfortable taking the risk of buying more of your favorite stocks, you can use naked puts to catch support levels on pullbacks, especially in fear-driven sell-offs when volatility inflates put premiums.
But even America's favorite plain-spoken investor, Warren Buffett, sells naked puts all the time.
You can see from the multiple scenarios at your disposal - earn option income, buy stock at a discount, or close options early for a profit (or breakeven, or a loss) - that you have lots of pre-determined control and choices with naked puts.
Other clubs around the United States are known for their specific interest, such as covered calls and naked puts.
The most popular income-generating strategy by far is selling covered calls (65 percent), followed by buy-writes (34 percent), spreads (26 percent) and selling naked puts (24 percent).
These forward positions include naked puts, forwards, matched put/call and spot deferred positions allocated to their intended periods of delivery and long term floating rate variable volume forwards.
Currently, the Naked Put section has 14 December candidates, all of which are above the sold strike (maximum profit).