Wolf_of_Walmart

Wolf_of_Walmart t1_jdyt0lf wrote

An option can either be in the money (ITM) or out of the money (OTM) which refers to the strike price of the option in relation to the market price of the stock.

Naked refers to writing call options without owning the underlying or writing put options without being cash secured. Selling naked options exposes you to unlimited risk.

If you are buying options, they aren’t naked since your max loss is your premium.

If the options you buy have low premiums, they are likely OTM. Do you pay attention to Delta, Theta, Gamma, and Vega when you look at options? If you aren’t using the Greeks or looking at ITM/OTM, whatever run that you’re currently on is unsustainable.

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