Writing naked

Writing naked

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.
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On days like today, put premiums have been 'jacked' up high, writing naked or cash-secured puts is a winning strategy, buying 1x index ETFs in small increments is a strategy (in my case those are non-commissioned that have no trading restrictions).
Under this analogy, writing naked CDS is equivalent to buying such insurance and committing arson and should therefore be banned.