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Investing Glossary:
Uncovered put
Copyright 2009,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
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| Definition: |
| A Short put option position in which the writer does not have a corresponding short Stock position or has not deposited, in a Cash account, cash or cash equivalents equal to the Exercise value of the put. The writer has pledged to Buy the Asset at a certain price if the buyer of the option chooses to exercise it. Uncovered put options limit the writer`s Risk to the value of the stock (adjusted for premium received.) Also called "naked" puts.
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