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7 lut 2024 · An uncovered option, or naked option, is an options position that is not backed by an offsetting position in the underlying asset. Learn the risks of this strategy.
17 maj 2024 · A naked option, also known as an uncovered option, is created when the seller of an option contract doesn't own the underlying security that's needed to meet the potential obligation that...
What is NOSA? The Naked Option Stress Analysis tool (NOSA) is Merrill’s proprietary margin requirement system, which assesses margin requirements on uncovered option accounts.
30 kwi 2024 · A naked put is an options strategy in which the investor writes (sells) put options without holding a short position in the underlying security.
19 mar 2024 · Uncovered options involve selling options without an offsetting position in the underlying asset, leading to higher risk exposure. Traders must carefully evaluate their risk tolerance and financial capacity before engaging in uncovered options trading.
To learn more about Merrill's uncovered option handling practices, view Naked Option Stress Analysis (NOSA) (PDF). Early assignment risk is always present for option writers (specific to American-style options only).
Selling an uncovered call based on a neutral-to-bearish forecast requires both a high tolerance for risk and trading discipline. A high tolerance for risk is required, because risk is theoretically unlimited.
