uncovered option

uncovered option definition - finance
An option position in which the writer doesnÂ’t own the underlying securities. If the option is exercised, the writer has to purchase the underlying securities in the market, which may result in a loss. Also called naked option.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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