What is NAKED POSITION?

A futures market’s un-hedged position. Call option writer with the right to buy or put option writer with the right to sell, having no corresponding long position or short position on the underlying asset, is in a naked position. The writer is exposed, unprotected from the price fluctuations that make this risky. Contrast to covered position. Also known as uncovered position.

More On This Topic




Link to This Definition

Did you find this definition of NAKED POSITION helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary