Short Call Options aka Naked Call
| B/S | Strike | Type | Price |
|---|---|---|---|
| Sell 1 | $45 | Call | $1.29 |
| Net Credit | ($129) | ||
A short call is simply the sale of one call option. Many refer to short positions as being "naked" the option. Selling options is also known as "writing" an option.
The Max Loss is unlimited as the market rises.
The Max Gain is limited to the premium received for selling the option.
Characteristics
When to use: When you are bearish on market direction and also bearish on market volatility.
A short is also known as a Naked Call. Naked calls are considered very risky positions because your risk is unlimited.
Short Call Option Greeks
Delta
Gamma
Vega
Theta
98 Comments
Admin March 24th, 2009 at 3:57am
That's either a Short Straddle or a Short Strangle:
https://www.optiontradingtips.com/strategies/short-straddle.html
https://www.optiontradingtips.com/strategies/short-strangle.html
Mavis March 24th, 2009 at 1:58am
Can anyone give an example for 'short call' and short put'?
Jerry March 16th, 2009 at 5:29am
Short call you want the market to go down and short put you want the market to go up. Both have limited profit and unlimited losses.
ADEL March 10th, 2009 at 9:10am
Hi, may I know what's the difference between SHORT CALL and SHORT PUT?
Paul January 26th, 2009 at 4:38am
Yes.
DAMODAR January 24th, 2009 at 8:40am
CAN THE OPTIONS (CALLS OR PUTS) SHORT AND COVER AFTER ANY TIME BEFORE EXPIRY DATE AS FUTERS SHORTSELLING AND SHORT COVERING?
Admin December 13th, 2008 at 11:57pm
Yes, correct. The writer is committed to selling the stock at the Strike Price if the buy decides to exercise. The premium received is the current traded price of the call option when traded.
HH December 12th, 2008 at 11:30am
In other words, does this mean that the 'writer' is selling a contract (at a price) where the writer will commit to selling a stock at an exercised price? is the 'premium' that the writer receives considered the price of the call?
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