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Bearish/Neutral Strategy

Short Call (Naked Call) Calculator

Calculate potential profit and loss for selling a naked call option. This is a bearish to neutral strategy with limited profit and unlimited risk.

High Risk Strategy

Naked calls have unlimited risk if the stock price rises. This strategy requires significant margin and is not suitable for all investors.

BearishUnlimited RiskLimited Reward

When you sell a naked call, you receive a premium upfront but take on the obligation to sell shares at the strike price if assigned. You profit when the stock stays below the strike price. Maximum loss is theoretically unlimited.

Trade Details

Current price: $100.00

Each contract = 100 shares

Trade Summary
Net Credit$300.00
Max Profit$300.00
Max LossUnlimited
Breakeven$108.00
Payoff at ExpirationStock Price vs Profit/Loss
Current: $100.00
Breakeven: $108.00

Max Profit

$300.00

Max Loss

Unlimited

Breakeven

$108.00

Premium Received

$300.00

Understanding Short Calls

A short call (or naked call) is an advanced options strategy where you sell a call option without owning the underlying shares. You receive premium upfront but take on significant risk if the stock rises.

When to Use a Short Call

  • You believe the stock will stay flat or decline
  • You want to collect premium income
  • You're comfortable with unlimited risk exposure

Key Formulas

Breakeven Price

Breakeven = Strike Price + Premium Received

Maximum Profit

Max Profit = Premium × Contracts × 100

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