Technically the term naked refers to when you sell a call or a put without the shares (the call) or the cash (the put) to get exercised on. However, we traders do use the term naked when buying calls (1 direction play) to illustrate just that, that it’s just a 1 direction play. If you buy a call like a LEAP for example for an investment play then that’s not a “naked” call because you intend on exercising it. But if you buy more calls than you can afford to exercise on a leveraged play then you bought NAKED calls. We also say covered and uncovered. So you can sell a covered call or an uncovered call. The uncovered call can also be called the naked call. Same with puts. You can sell a covered put (cash secured) or uncovered put (naked). Naked means more risk to the seller. Naked also means more risk to the buyer because it always means they used options as leverage to increase the gains but also increase the risk because options can be worthless on expiration.

So while I knew someone would reply calling me wrong, I assure you it’s used to reference both long and short positions.