Options Glossary

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Uncovered Option

A short option position, also called a "naked" option, in which the writer does not own shares of underlying stock. This is a much riskier strategy than a covered option.

Underlying Instrument

A trading instrument subject to purchase upon exercise.

Undervalued

A security selling below the value the market value analysts believe it is worth.

Upside

The potential for prices to move up. Upside break-even The upper price at which a trade breaks-even.