options correct terminology

Back in the day you had to specify buy/sell to open/close. Ridiculous. Same with naked/covered.

 

Yes. Never heard what you wrote in real life. No one says naked

 

long or short risks are limited, up to your account balance.

 

Maybe I'm missing the point but:

• Selling a covered call means you hold sufficient shares to deliver as obligated.
• Selling a naked call means you do not hold sufficient shares to deliver as obligated.
• Selling a covered put means you are short sufficient shares to "buy" the shares as obligated when you "buy to close" your short.
• Selling a cash secured put means you have sufficient funds to buy the shares as obligated.
  
• Selling a naked put means you are not short sufficient shares, and you don't have sufficient funds to buy the shares as obligated.

 

Hey wxy, throw in some portfolio margining.

 

I started a topic about all the ambiguous terminology in finance...Margin was one of them.

 

I trade equity volatility for a fund and we are quoted a volatility when dealing with agencies or bank desks. I have never been quoted the neutral position and I think I would remember the naked part.

 

I exercise naked. I'm an options trader

 

If you trade vol you hardly ever trade naked. I think that's implied ;-)

 

"Naked" is European equivalent for "live". Also, when we say "tied", they say "covered". There are many NSFW jokes that can be made