Writing Naked

Writing naked

See: Naked option

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Writing Naked

An investment strategy that involves selling naked options. A naked option is an option contract without another, opposite option hedging the risk. Unlike more complex spreads and straddles, which involve the purchase or sale of multiple options in order to profit in different ways, naked options are straightforward calls or puts. An investor with a naked option makes a profit or loss depending on the movement of the underlying asset.