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Naked Put
(redirected from Uncovered Puts)

   Also found in: Wikipedia 0.01 sec.
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.


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And if you're interested in income-producing strategies like selling covered calls or selling uncovered puts, you'll have a terrific opportunity to make money once this pattern plays out and the VIX blasts higher.
Instead of buying Calls (Buy option) to play the market Up or buy Puts(sale option) to play the market down, why not sell Uncovered Puts under the current market position at a safe strike price and collect premiums month after month.
Selling uncovered puts on FXP shares, however, puts cash in my hand immediately, allows me to profit if FXP moves higher, and pays me enough to absorb the risk if the stock moves against me.
 
 
 
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