naked position

(redirected from Unhedged Position)

Naked Position

A position that is not hedged. That is, the holder of a naked position has taken no step to reduce the risk inherent to the position. For example, if one buys 100 shares of AT&T, one is exposed to the risk that AT&T will decline in price. If one takes no action to prevent this (by buying put options or short selling AT&T, for instance), one holds a naked position in AT&T. Avoiding naked positions and hedging as much risk as possible is a substantial concern for many institutional investors.

naked position

A security position, either long or short, that is not hedged. For example, an investor short 500 shares of IBM with no other position in IBM stock (such as ownership of calls) has a naked position in that security. Because a naked position subjects the investor to large potential gains or losses, it is an aggressive investment position.
References in periodicals archive ?
Knight Transportation also maintains an unhedged position for fuel expenditure and the amount of fuel surcharge that the company collects from its customers is lower than its total fuel expenses providing a room for bottom-line expansion.
These positions, in addition to a larger-than-normal unhedged position in 2014 due to Vermont Yankee being in its final operating year, allowed EWC to benefit from the increases in northeast market power prices throughout the quarter.
We still recommend an unhedged position and believe declines, if any, will be limited to 4.
What this means is that the market was assessing a maximum risk to an unhedged position with this profile to be around $450,000.
gain) on the unhedged position in the event the foreign
We recommend an unhedged position and declines, as mentioned above, should be limited to 4.
restructuring of this hedge book leaves Target in an unhedged position with the
The Company maintains an unhedged position in Potash due to this flexibility in switching between oil and gas production to capture the highest rate of return on both oil and gas volumes.
Earnings were also adversely affected by the continuing weakness of the dollar against the Swiss franc, which, given the company's unhedged position, may be expected to continue until the dollar strengthens.
Fitch notes that for unhedged positions, exchange rate risk is included as part of Fitch's assessment of the sufficiency of asset coverage available to rated AMPS.
Cipla and IPCA Laboratories have some unhedged positions and so may marginally gain from the rupee depreciation.
CIBC has both hedged positions through insurance as well as unhedged positions.