Buying naked stock options is a maneuver to take advantage of correct market timing. Perhaps the only reason you may want to buy a naked call or put option is when you expect a significant change in the price of the stock in a given period of time. The following conditions sum up the timing for buying a naked stock option:

• The underlying stock is expected to move in a particular direction

• An option volatility that is low is a positive in buying naked stock options

• Time decay is minimized

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