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Technical Analysis Glossary:
Uncovered put
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Definition: |
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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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