Naked position - How To Discuss

■■■■■ position,

Definition of ■■■■■ position:

1. Unhedged position in a futures market. Writer of a call option (right to buy) or put option (right to sell) who does not have the corresponding long position or short position on the underlying asset is in a ■■■■■ position he or she is unprotected from the risks of price fluctuations. Opposite of covered position. Also called uncovered position.

2. A ■■■■■ stock position does not have the hedging associated with a call or put option or perhaps an opposite position in a related stock. For example, a long in Coke and a short in Pepsi.

3. In securities trading in general, a ■■■■■ position refers to a securities position, long or short, that is not hedged from market risk. Both the potential gain and the potential risk are greater when a position is ■■■■■ instead of covered or hedged in some way. In options trading this phrase specifically refers to an option sold by a trader without an established position in the underlying security.

How to use ■■■■■ position in a sentence?

1. A ■■■■■ position is also commonly used to referred to an option that is sold without a position in the underlying security as protection against the risk of option assignment.
2. This phrase is more often associated with short-selling stocks.
3. A ■■■■■ stock position is a position that is not hedged.