A naked or uncovered option position is one in which the writer of an options contract lacks either the shares or funds necessary to fulfill the terms of the contract should it be exercised by its ...

The owner (buyer) of a put option has the right to sell 100 shares of a stock to the option writer (seller) at the strike price outlined in the contract any time before the contract expires.

which provides an opportunity to the option buyer and risk to the option writer which they need to be compensated for. Put options are purchased by traders who believe the stock price will go down.