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11 Secrets of Naked Option Writing

Here's what you need to know before you get naked

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Before You Get Naked …


Top 10 Options Trades for 2011

While the potential rewards from writing naked options are outstanding, and the odds of winning are strongly in your favor, there are some substantial risks. In fact, there is unlimited risk when writing naked calls, and extensive risk when writing naked puts — the risk that the underlying stock will move through and far above or below the options strike price.

This highly publicized risk scares many investors away from this strategy, and many naked options writers have lost their shirts (pardon the pun). But, although the risk is real, it is usually greatly exaggerated, and if you follow the guidelines I’m about to share with you, you will control that risk and reap the rewards that this game offer.

Article printed from InvestorPlace Media, http://investorplace.com/2011/08/writing-naked-options/.

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