Talk:Naked option

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Misleading concept[edit]

there is no such thing as a covered/naked put. if you buy a put, you don't buy the stock at the same time to sell it to the writer, there would be zero profit in this move. you buy a put, wait for the stock to go below the strike price, buy the stock on the open market,and sell it to the writer at the strike price. if the price is above the strike price you let it go worthless. if you sell (write) a put, you are under obligation to buy the stock at the strike price, why would you buy the stock? if the price goes down, you will lose on the stock you bought and will lose again on the assignment of more stock. --Geraldwondra (talk) 05:19, 11 July 2012 (UTC)[reply]

Rename[edit]

Naked Put was changed to Naked put according to Wikipedia:Manual of Style (capital letters). Shawnc 17:50, 13 December 2006 (UTC)[reply]

Add a graph[edit]

This needs a graph, like the one for covered call. Anyone have one, or the know-how? Netsumdisc 20:31, 12 March 2007 (UTC)[reply]

Done (awhile ago). --FeralOink (talk) 23:25, 21 February 2012 (UTC)[reply]

Does this mean anything[edit]

How do you cover a put? Does "covered put" even mean anything? If not, what's the logic behind the term "naked put"? Spoxjox (talk) 18:27, 21 August 2008 (UTC)[reply]

Yes, you can cover a put just like you can cover a call. Calls and puts are mirror images of each other. It is easier to think in terms of calls for me. One can buy a call. One may sell a call. If one hedges the short call with a long position in the underlying stock, then it is a covered call. If not, it is a naked call. The same is true for put options. If one sells a put option and simultaneously buys the underlying stock, then it is a covered put position. In the scenario here, a naked or uncovered put, one is selling the put option without buying the underlying stock. --FeralOink (talk) 23:25, 21 February 2012 (UTC)[reply]

For it to be a covered put, you would have to be short on the underlying stock, not buying it. 99.186.225.51 (talk) 19:53, 14 May 2014 (UTC)[reply]

Game?[edit]

Why do commentators often refer to investments or the financial markets as a game? Professional investors do not play at the markets. Dave capurro (talk) 06:01, 19 February 2009 (UTC)[reply]

I wonder about that too! Most news and media people who refer to investments or financial markets with terminology similar to phrases used for game playing are clueless. But remember, these are also the same people who will say "Oh, the Dow sold off today, it was down X points", when X points is in fact equivalent to a change of merely 0.05%! (For example, when a stock index is at 10,000 points, and the market closes down 5 points, a very ordinary event). Anyone who makes comments like that is not a "professional investor". --FeralOink (talk) 23:25, 21 February 2012 (UTC)[reply]

Merge proposal[edit]

I do not think this article should be merged with 'put option', they are separate options. Also, we have two separate articles for 'call option' and 'naked call'. Lbecque (talk) 23:52, 17 June 2009 (UTC)[reply]

Merge. Only 4 sentences in this article address naked puts. The bulk of this article discusses options and put options. 24.23.157.146 (talk) 00:59, 2 January 2010 (UTC)[reply]

2022 Merger proposal[edit]

Unless there are no objections, I would like to merge the Naked put and Naked call articles into a newly expanded Naked option page. This would be similar to how we merged Covered put and Covered call into a new Covered option page earlier this year. As well as resources like Investopedia's article on naked options. Like the Covered option page, the new merged Naked option article will also include the similarities of naked calls and puts -- like how they have the highest risk of all the option strategies, how brokers generally require traders to have margin accounts and the highest options approval level, and so forth. And expand on the examples to include the most extreme cases where the naked options writer could really get screwed if the underlying stock suddenly falls down to practically $0 or gaps up to "infinity". Thanks. Zzyzx11 (talk) 02:16, 19 August 2022 (UTC)[reply]

There was no objection for about six weeks, therefore I have been bold and performed the merger. Zzyzx11 (talk) 00:07, 2 October 2022 (UTC)[reply]