What is a naked call option?

En naken köpoption är en utfärdad köpoption där utfärdaren inte äger det specificerade antalet aktier som specificeras av optionen och inte heller har deponerat kontanter motsvarande lösenvärdet för köpet. Denna typ av alternativ kallas även för nakna samtal och är motsatsen till täckta köpoptioner, eller covered calls. Denna optionsstrategi är en av de mest riskfyllda optionsstrategierna du kan ta eftersom det finns obegränsad risk.

A naked call option is a written call option where the writer does not own the specified number of shares specified by the option nor has deposited cash equal to the exercise value of the call. This type of option is also known as naked calls and is the opposite of covered calls. This option strategy is one of the riskiest option strategies you can take because there is unlimited risk.

Explanation of a naked call option

A naked call option is usually created by issuing a call option without owning the underlying stock. Covered calls, where the writer of the option also owns the stock and thus protects himself against large price increases, are protected against large losses. Using naked options, on the other hand, can have unlimited losses when the price of the stock rises. Here is the option payout chart associated with this strategy:

As you can see above, as the share price increases (towards the right), the loss can continue indefinitely.

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