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Strategies & Market Trends : Tech Stock Options

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To: Jeffrey E. Klein who wrote (58310)	1/11/1999 10:22:00 AM
From: Art C.	Read Replies (1) of 58727

So that we don't get hung up in terminology---A naked call as defined in GETTING STARTED IN OPTIONS by Michael C. Thomsett is an option that is sold to create an open position when the seller does not own 100 shares of the underlying stock. Jeffrey, the way that I understand it (simply) is that if you put yourself into a position to sell something that you do not have, then you are naked to the risk of having to buy that equity if that option is exercised. If you are buying an option, then you are only extending an offer to buy that equity at a particular price and you are only at risk for the premium. Art

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