Short Call (naked)
Outlook: Bearish
Single leg
Sell a call without owning shares. Collect premium. Theoretically unlimited loss.
Max profit
Premium collected.
Max loss
Theoretically unlimited if the underlying rallies.
Breakeven
Strike + premium.
Legs
Short
1×
call
ATM +10
Structure
Short 1 call at the chosen strike. No shares held.
When to use
Rarely. The unbounded tail makes this a position for experienced sellers only, almost always wrapped inside a vertical credit spread to define the risk.
Example
SPY at $450. Short 460 call for $2.50. Max profit $250. SPY rallies to $500 → loss $3,750.
Notes
- Almost never traded standalone outside of professional vol selling.
Build it in the simulator
Open this structure in the app, adjust spot, IV, and DTE, and watch the payoff and Greeks move.
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