A short call option position in which the writer does not own shares of underlying stock represented by the option contracts. Uncovered calls are much riskier for the writer than a covered call, where the writer of the uncovered call owns the underlying stock. If the buyer of a call exercises the option to call, the writer would be forced to buy the asset at the current market price. Also called a "naked" asset.
Nearby TermsUncollectible account Unconfirmed Letter of Credit Uncovered call Uncovered call writing Uncovered options
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University