Definition of Uncovered Call
What is an Uncovered Call
An uncovered call is an option strategy where there is an open call option position on a security or any other underlying asset that has been sold or written. It is a strategy to consider when there is bearish sentiment on the underlying asset and the price is expected to decline or stay at the current price.
An uncovered call is also known as a naked call or short call.
Glossary of Terms and Phrases
A financial dictionary or glossary is an essential tool to better understand the meaning of a specialized term or phrase. It would obviously make life much easier if everyone spoke the same language and used the same financial terms and phrases but that is not realistic.
We learn new languages to communicate with each other, transact business globally and to appreciate other cultures. Global finance is a specialized language that if understood and mastered, it will provide benefits that help to decrease risk and improve investment returns. Financial literacy is the foundation of developing good investment strategies and sound decision making.