Naked Option
An options position sold without any offsetting position in the underlying or another option.
Explanation
Naked options carry unlimited risk (naked calls) or substantial risk (naked puts). They require significant margin and are suitable only for experienced traders. Naked puts have risk down to zero on the underlying; naked calls have theoretically unlimited risk. Most brokers require higher account levels for naked options.
Example
Selling a naked 160 call on AAPL without owning shares means you have unlimited upside risk if AAPL rallies above $160 plus your premium received.