Uncovered Put writing

A short put option position in which the writer does not have a corresponding short position in the underlying security or has not deposited, in a cash account,

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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naked writer

References in periodicals archive

Uncovered Put Writing. A put writer is considered to be uncovered if 1) there is no corresponding short stock position or 2) no cash deposits or cash equivalents equal to the exercise value of the put exist.

A RISK-MANAGEMENT APPROACH TO INVESTING IN OPTIONS

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