[Solved] Simplify. Underlying Asset: The financial asset upon which a derivative's value is based, such as stocks, bonds, commodities, or currencies. Naked Call Option: An options strategy where an investor sells call options without owning the underlying asset, exposing the seller to unlimited risk. Potential Loss: Refers to the possible financial loss or damage that might arise from a risk or unfavorable event. Break-Even Price: The financial point at which an asset needs to be sold for an investor to regain their initial outlay without experiencing any gain or loss.