Uncovered options

Uncovered options
See: Naked options
Uncovered put
A short put option position in which the writer does not have a corresponding short stock position or has not deposited, in a cash account, ...

Uncovered options are options that are not backed by another position. Sometimes referred to as a naked option, ...

Uncovered Options
The uncovered options trading system was designed to satisfy the demands of mid-term oriented option traders who wish to place conservative trades using index derivates, for maximum returns and at minimum risk.

Uncovered Options
Learn how to make options time decay work to increase your portfolio.
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For nearly two years now, we have been ranking so-called "married" (or "protective") puts (as well as uncovered options and covered calls). These married put positions consist of owing the stock and buying a put to protect that stock.

Collateral - the loan value of marginable securities; generally used to finance the writing of uncovered options.
Combination-any position involving both put and call options that is not a straddle.
Commodities - See Futures Contract.

Considering that one contract covers 100 underlying shares, that's a lot of money. Therefore, selling stock options on their own, also known as selling Naked or Uncovered options, is extremely risky.

Also called "naked" puts, the writer has pledged to buy the stock at a certain price if the buyer of the options chooses to exercise it. The nature of uncovered options means the writer's risk is unlimited.

It is imperative, therefore, that the seller demonstrate the ability to meet any potential contractual obligations beforehand. In addition, the seller of uncovered options on interest rate futures assumes the potential for significant losses.

See also: Option, Options, Uncovered option, Uncovered, Sell