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)
- Sell a call at strike A