Can I sell naked Options?

Q: Can I sell naked options?

A: Yes, selling naked options is allowed.

Q: What are naked options?

A: Naked options, also known as uncovered options, refer to options contracts that are sold without owning an offsetting position in the underlying security. When a trader sells a naked call option, they are obligated to deliver the underlying asset if the option is exercised. Similarly, selling a naked put option means the trader must buy the underlying asset if the option is exercised.