An actionless strategy in derivatives where an investor does nothing to hedge a position he has already taken in a derivative product such as an option. For example, a naked position could be the position of an investor who writes a call or put option without taking a corresponding long position or short position on the underlying asset. Such a position increases the potential reward and risk to an investor.
The naked position is the opposite of a covered position.
It is also known as an uncovered position.
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