What is the primary risk associated with uncovered call writing?

The primary risk associated with uncovered call writing is the potential for unlimited loss. When an investor writes a call option without holding the underlying asset, they are taking on significant risk. If the price of the underlying asset rises significantly above the strike price, the seller of the call option is obligated to provide the asset at the agreed-upon price. Since there is no limit to how high the underlying asset's price can rise, the financial losses can be substantial, leading to potentially infinite liability if the option is exercised and the seller must buy the stock at a much higher market price to fulfill the obligation.

This scenario contrasts with other types of risks mentioned in the question. Market risk refers to the chance that the overall market will decline, affecting all securities, while liquidity risk relates to the inability to buy or sell an investment quickly without affecting its price. Interest rate risk is associated with changes in interest rates impacting the value of fixed-income securities. However, none of these risks reflect the fundamental exposure inherent in uncovered call writing, which is characterized by the possibility of significant or unlimited financial losses.