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Stocks

Naked Writer

An option writer is a trader who sells an option contract without owning an underlying security. This strategy can be used to generate income, as the writer collects the premium from the buyer. However, it also carries significant risks, as the writer is obligated to fulfill the terms of the contract if the option is exercised. Therefore, it is important for traders to understand the potential consequences of being an option writer before engaging in this strategy.

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