naked position

(redirected from Unhedged Positions)

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 ?
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.
attainable only through unhedged positions and conversely
gain) on the unhedged position in the event the foreign
Those hedges, combined with prior hedges entered into by Atlas America and current unhedged positions result in:
The base case and alternate low-case forecasts of future real-time power market prices in major regions and sub-regions are used to quantify the potential financial implications of long or short commodity positions affecting companies in the power and gas sectors - unhedged positions of wires companies and retail providers, integrated utilities, generation companies and wholesale energy providers,' said Lapson.
The Company notes a strengthening in the gold price and major gold companies are returning to unhedged positions on the metal price in anticipation of higher, sustained prices.
It is highly likely that a number of retailers operating in South Australian and New South Wales (NSW) will have incurred losses due to their unhedged positions during this period.
In Orange County, the aggressive use of leveraging to enhance yield and substantial, unhedged positions in derivative instruments which were highly sensitive to increases in interest rates resulted in market value losses, collateral calls which forced realization of those market value losses, and finally, demands for withdrawal of their funds by participants who were not mandated to be in the pool.