naked option
- 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
- If the market price rises substantially, a naked option could result in significant loss for the seller.
- Investors with high risk tolerance might consider using a naked option strategy.
- He sold a naked option, betting that the market price of the stock would decrease.
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