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1 NAIC

National Association of Insurance Commission, which is an organization with no legal power but with substantial political clout. Commissioners of insurance in each state wield considerable power individually and exert influence collectively through NAIC.

2 Naked Option Writing

The owner of shares of common stock can write, or create, an option and sell it in the options market, in an attempt to increase the return or income on a stock investment. A more venturesome investor may create an option in this fashion without owning any of the underlying stock. This naked option writing exposes the speculator to unlimited risk because he or she may have to buy shares at some point to satisfy the contract at whatever price is reached. This is a serious risk if the value of the underlying asset has a high degree of variability.

3 Naked Options

The writing of a call or put option without owning the underlying asset is known as naked options. Naked options are much riskier than the covered...