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Short call calculator
Bearish naked sale. Collect premium; losses are unlimited if the stock rallies.
OutlookBearish
Max profitLimited
Max lossUnlimited
LevelAdvanced
What is a short call?
A naked short call keeps the credit if the stock stays below A. A rally has no cap, so this is undefined risk without a long hedge or shares.
Legs
- Sell a call at strike A
Live example on SPY
Short Call
Net credit$214.00
Max lossUnlimited
Max profit$214.00
Chance of profitLocked: ProUpgrade
BreakevenBelow $802.14 (+6.2%)At expiration
Est. margin$79,786.00
- 800C−112/18 · $2.14
With SPY at 755.53, on the Dec 18 expiration (49 days out): sell 1 800 call. Net credit $214. Max profit $214; max loss unlimited. Breakeven at expiration: Below $802.14 (+6.2%).
Open this short call in the calculator to move the strikes, change the date and implied volatility, and read profit and loss by price and date.
Questions
- What is a short call?
- A naked short call keeps the credit if the stock stays below A. A rally has no cap, so this is undefined risk without a long hedge or shares.
- When does a short call make money?
- Bearish naked sale. Collect premium; losses are unlimited if the stock rallies.
- What is the max profit of a short call?
- Limited: there is a ceiling on what it can make. The calculator gives the figure for your strikes and expiration.
- What is the max loss of a short call?
- Unlimited: the loss keeps growing the further the price moves against it. The calculator gives the figure for your strikes and expiration.
- How do I calculate a short call's profit and loss?
- Open the short call in the strategy calculator. It places the legs on a real expiration, and you can drag the strikes, change the date, and read profit and loss by price and date, with max profit, max loss, and the breakevens.