A naked (short) call sells a call without owning the stock. You keep the premium if the stock stays below the strike, but the risk is theoretically unlimited if it rallies — one of the highest-risk options trades.
Open the Naked Call calculator →A naked call profits when a stock stays flat or falls, letting the call expire worthless so you keep the premium. It is used by experienced, well-capitalised traders who are confident a stock will not rally past the strike.
Unlike a covered call, you do not own the shares to deliver if assigned — so a sharp rally forces you to buy the stock at the market price to cover, with losses that grow without limit.
The unlimited upside risk is what makes the naked call so dangerous: a takeover or a squeeze can move a stock far beyond the strike overnight, dwarfing the small premium collected. Brokers require large margin for exactly this reason.
Most traders cap the risk by buying a higher-strike call against it — turning the position into a defined-risk bear call credit spread. Beginners should not sell naked calls at all.
Use the free OptionProfit Naked Call calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
In theory an unlimited amount — losses grow as the stock rises with no cap, which is why a naked call is one of the riskiest options trades.
No. A covered call is backed by 100 shares you own (capped risk); a naked call has no shares behind it, so the upside risk is unlimited.
Buy a cheaper, higher-strike call to define the maximum loss — that converts it into a bear call credit spread.
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