  A naked position refers to a situation in which a trader sells
an option contract without holding a position in the underlying
security as protection from an adverse shift in price. Naked
positions are regarded as very risky because some positions can,
in theory, lead to an unlimited amount of loss. This is why many
brokers do not allow inexperienced traders to place this type of
order.  For example, if the writer of a call option does not own
the underlying security, he will be exposed to extreme risk
because if the price of the underlying heads dramatically
higher, he will be obligated to sell the underlying to the
purchaser at the predetermined strike price. (To learn more, see
Naked Call Writing.)  Let's assume that the current price of XYZ
Company is $11 and an option trader sells 10 call options with a
strike price of $15 for $50 per contract. The price of the
option contract is quoted in terms of each share that a contract
represents (most commonly, a contract will represent 100
shares). In nearly al