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Dec 31, 2021 · Naked Option: A naked option is a trading position where the seller of an option contract does not own any, or enough, of the underlying security to act as protection against adverse price ...

Initial Margin Calculations. When writing a naked call, the margin is the greater of 1, 2, or 3: 100% of the option proceeds + (20% of the Underlying Market Value) – (OTM Value) 100% of the option proceeds + (10% of the Underlying Market Value) 100% of the option proceeds + ($100/contract) When writing a naked put, the margin is the greater ...

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A naked option involving a "call" is called a "naked call" or "uncovered call", while one involving a "put" is a "naked put" or "uncovered put". The naked option is one of riskiest options strategies, and therefore most brokers restrict them to only those traders that have the highest options level approval and have a margin account. Naked ...

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