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Investing Glossary:
Uncovered call
Copyright 2009,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
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| Term: |
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| Definition: |
| A short Call option position in which the writer does not own Shares of underlying Stock represented by the option contracts. Uncovered calls are much riskier for the writer than a Covered call, where the writer of the Uncovered call owns the Underlying stock. If the buyer of a call exercises the option to call, the writer would be forced to Buy the Asset at the current Market price. Also called a "naked" asset.
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