Build a Short Call Strategy

What is a short call?

BearishLimited ProfitUnlimited Loss

A simple but risky strategy which results in an initial credit. By selling a call, you are liable to sell 100 shares of the underlying stock at strike price A if assigned. Because of this, you should have the cash or stock to cover such a situation. If it expires below strike A, you simply keep the full credit.

(also known as: Naked Call)
AProfitLossStock Price
  • Sell a call at strike A