When an option writer does not own the asset,it is called a

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When an option writer sells options without owning the underlying asset, it is known as writing a naked option. This is considered a risky strategy as the writer is exposed to potentially unlimited losses if the underlying asset price moves against their position. Straddle is a strategy where an investor buys or sells both a call and a put option on the same underlying asset with the same expiration date and strike price. Covered option is a strategy where the option writer owns the underlying asset to cover any potential losses. Warrant is a financial instrument that gives the holder the right to buy underlying shares at a specific price within a specified time period.

When an Option Writer Does Not Own the Asset,it Is