naked option

Definition of "naked option"
  1. An offer to purchase stock at a predetermined price from a seller who doesn't already possess the stock, requiring the seller to buy the stock at the current market price if the buyer decides to initiate the purchase
How to use "naked option" in a sentence
  1. If the market price rises substantially, a naked option could result in significant loss for the seller.
  2. Investors with high risk tolerance might consider using a naked option strategy.
  3. He sold a naked option, betting that the market price of the stock would decrease.

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