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Naked Writer

Naked Writer

What is 'Naked Writer'

An options seller who does not own the underlying security for the options contract he or she is offering. Options are contracts that give the buyer the right but not the obligation to buy (call) or sell (put) shares at a particular price and future date. Since a naked writer does not hold a position in the underlying security represented in the options contract, the investor is exposed to more risk.


Also called uncovered writer or uncovered options writer.

Explaining 'Naked Writer'

Naked writers are exposed to additional risk, since they hold no position with which to hedge against the adverse movement of the underlying security's price. If the options contract is exercised, the naked writer would be forced to buy or sell a certain number of shares at a potentially undesirable price. Naked writers try to profit by receiving premiums for writing the contracts without the need to purchase share lots.


Naked Writer FAQ

What are the two most important assumptions in economics?

The two main assumptions in economics are that people are rational and that people are selfish. These assumptions are used to better understand the consumer.

What are assumptions in economics?

Assumptions simplify complex processes, making them easier to understand. This helps to understand consumer and business behavior and the motivations behind economic decisions.

Why do economists make assumptions quizlet?

Economists use assumptions to simplify and better understand economic concepts. Assumptions are often used to understand economic decisions, such as business behavior and consumer motivations.

Do economists make assumptions?

Economists use assumptions to simplify and better understand economic concepts. Assumptions are often used to understand economic decisions, such as business behavior and consumer motivations.

Further Reading

E. Banks, The Palgrave Macmillan Dictionary of Finance, Investment and Banking© Erik Banks 2010E. Banks, The Palgrave Macmillan Dictionary of Finance, Investment and Banking© Erik Banks 2010
link.springer.com [PDF]
naked economics Undressing the Dismal Science fully revised and updated CHARLES WHEELAN Foreword by … of this was obvious to Shakespeare, but it's relatively new to mainstream economics. As New York Times columnist David Brooks noted, “Economic behavior can be …

Charles Wheelan, Naked Economics: Undressing the Dismal ScienceCharles Wheelan, Naked Economics: Undressing the Dismal Science
link.springer.com [PDF]
naked economics Undressing the Dismal Science fully revised and updated CHARLES WHEELAN Foreword by … of this was obvious to Shakespeare, but it's relatively new to mainstream economics. As New York Times columnist David Brooks noted, “Economic behavior can be …

Naked and dirty: rethinking (not) attending festivalsNaked and dirty: rethinking (not) attending festivals
www.tandfonline.com [PDF]
naked economics Undressing the Dismal Science fully revised and updated CHARLES WHEELAN Foreword by … of this was obvious to Shakespeare, but it's relatively new to mainstream economics. As New York Times columnist David Brooks noted, “Economic behavior can be …

The naked word: The trans-corporeal ethics of the protesting bodyThe naked word: The trans-corporeal ethics of the protesting body
www.tandfonline.com [PDF]
naked economics Undressing the Dismal Science fully revised and updated CHARLES WHEELAN Foreword by … of this was obvious to Shakespeare, but it's relatively new to mainstream economics. As New York Times columnist David Brooks noted, “Economic behavior can be …


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