naked option

naked option
naked option see option 3

Merriam-Webster’s Dictionary of Law. . 1996.

naked option
An opportunity to buy stock at a fixed price, offered by a seller who does not own the stock to back up the promise. If the buyer wants to exercise the option, the seller must purchase the stock at market price to make good on the offer.
Category: Business, LLCs & Corporations → LLCs, Corporations, Partnerships, etc.

Nolo’s Plain-English Law Dictionary. . 2009.

Look at other dictionaries:

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  • naked option — noun a put or call option for which the seller or buyer has no underlying security position • Hypernyms: ↑option …   Useful english dictionary

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  • naked option position — An open options contract that is not covered by an offsetting position in the underlying futures commodity or by another options contract against which it can be spread. Chicago Mercantile Exchange Glossary …   Financial and business terms

  • option — op·tion 1 / äp shən/ n 1: the power or right to choose; also: a choice made or available 2: a privilege of demanding fulfillment of a contract on any day within a specified time 3: a contract conveying in exchange for the payment of a premium a… …   Law dictionary

  • naked — Bare; wanting in necessary conditions; incomplete, as a naked contract (nudum pactum), i.e., a contract devoid of consideration, and therefore invalid; or, simple, unilateral, comprising but a single element, as a naked authority, i.e., one which …   Black's law dictionary

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