naked option

noun | \ ˈäp-shən \ | op·tion

1. : the power or right to choose; also : a choice made or available : a choice made or available

2. : a privilege of demanding fulfillment of a contract on any day within a specified time

3. : a contract conveying in exchange for the payment of a premium a right to buy or sell designated securities, commodities, or interests in property at a specified price during a stipulated period; also : the right conveyed by such a contract decided to exercise his option : the right conveyed by such a contract decided to exercise his option

   — call option
   : an option to buy at a fixed price at or within a certain time — compare put option in this entry

   — covered option
   : an option in which the optionor owns the security or commodity to be conveyed under the option — compare naked option in this entry

   — futures option
   : an option on futures

   — incentive stock option
   : a stock option granted by a corporation to its officers and employees as supplementary compensation that is subject to special tax treatment under the Internal Revenue Code

   — index option
   : an option on a stock index

   — naked option
   : an option in which the optionor does not own the security or commodity and will have to purchase it at market price if the optionee decides to exercise the option — compare covered option in this entry

   — put option
   : an option to sell for a fixed price at or within a specified time

   — stock option
   : an option giving the optionee the right to purchase a specified number of shares of stock from a corporation at a specified price at or within a specified time — see also incentive stock option in this entry

4. : a right of an insured to choose the form in which various payments due him or her on a policy shall be made or applied

   — dividend option
   : an option allowing the owner of a participating insurance policy and especially a life insurance policy to determine how dividends are to be paid (as in cash or by being applied as payment for additional insurance)

   — installments-for-a-fixed-amount option
   : a settlement option in which the insurer retains the policy proceeds and makes periodic payments of a fixed amount until the proceeds are exhausted — called also fixed amount option

   — installments-for-a-fixed-period option
   : a settlement option in which the policy proceeds are retained by the insurer and paid in installments over a fixed period of time — called also fixed period option

   — interest-only option
   : a settlement option in which the insurer retains the policy proceeds and makes interest payments at a guaranteed minimum rate

   — joint-and-last-survivorship option
   : an option in which the insurer makes periodic payments to two or more persons (as a husband and wife) of the proceeds or usually cash value of a policy until the death of the last survivor

   — life income option
   : a settlement option in which the insurer retains the policy proceeds and makes periodic payments for the beneficiary's life or for a specified number of years even after the beneficiary's death with payments to a different recipient

   — nonforfeiture option
   : an option (as to surrender the policy for its cash value or convert the policy to one with a smaller face amount or to a term policy with a shorter period) available to a policyholder who has ceased paying premiums

   — settlement option
   : an option to receive payments of the proceeds of a life insurance policy other than by lump sum

transitive verb

1. : to grant or take an option on started buying or optioning riverfront land —Rita Koselka