basicVery High RiskBearish / Neutral
Naked Call
Sell a call without owning the stock. High risk — unlimited loss potential if the stock surges.
What is a Naked Call?
You sell a call without holding the underlying shares. You collect premium, but if the stock rises above the strike, you must deliver shares at that price (buying them at market). Since stocks can rise indefinitely, your loss is theoretically unlimited. This is the highest-risk option strategy and requires significant margin.
When to use it
Only used by experienced traders in very bearish or low-volatility environments. Not recommended for most traders due to unlimited risk. If you must sell a call naked, use a stop-loss or be prepared to roll aggressively.
Structure
Sell 1 call without owning 100 shares of the underlying.
Key Metrics
Max Profit
Premium received. Earned if stock stays below strike.
Max Loss
Unlimited as stock rises above strike.
Breakeven
Strike price + premium received.
Greeks Profile
Delta: negative (loses as stock rises). Theta: positive. Vega: negative. Gamma: negative (sharp moves hurt).
Tips & Best Practices
- 1Consider a call credit spread instead — limits your risk dramatically.
- 2If selling naked, always have a mental stop at 2× the premium received.
- 3Never sell naked calls on earnings plays or volatile biotech stocks.
- 4Brokers require margin and high account tier to sell naked calls.
See it in action
Model a Naked Call with a real ticker. See the P&L chart, heatmap, and exact breakevens.
Open Naked Call Calculator →