Is there an underlying security position in naked option?
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charity
Apprentice
Joined: 15 Nov 2004
Posts: 4
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 Posted: 08/03/08 - 06:31 Post subject: |
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| Can you tell me something please? With naked options, what was the deal again? Is there an underlying security position when it comes to naked options, or not? I am in a bit of a hurry, so if you could answer the question now, then I would be really grateful for it later. |
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mohandis
Apprentice
Joined: 22 Jul 2006
Posts: 8
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| Posted: 09/02/08 - 00:14 Post subject: |
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| No, there is no underlying security position with a naked option, which is the exact reason why they are so dangerous to trade in. Losses can be huge, and the risks that you will loose out are very high. On the up side though, the profits that can be made are fantastic, which is why some people do take those risks. |
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