Naked Put

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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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Written by a successful stock options investor of eighteen years' experience, Covered Calls and Naked Puts is a straightforward guide to low-risk opportunities in the options market.