Ratio Call Write Calculator
A ratio call write owns 100 shares and sells two calls against them. One call is covered by the stock, the other is naked, so you collect double the premium of a covered call — but you take on uncapped risk if the stock rallies through the strike.
Interactive calculator
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Key characteristics
- Own 100 shares + sell 2 calls: double the premium of a covered call.
- Best on a flat or slowly drifting stock you expect to stall near the strike.
- Max profit at the strike = (strike − cost) × 100 + both premiums.
- Uncapped risk above the upper breakeven — one short call is naked.
When to use a ratio call write
Use it when you own a stock you expect to go sideways or rise only gently to a level where you would happily sell. Selling two calls instead of one maximises income and pushes your peak profit to that strike.
It is an aggressive overwrite: the extra short call is uncovered, so the position trades higher income today for real risk if the stock breaks out above your strike.
Risks and management
The danger is a rally. Above the upper breakeven the naked short call loses faster than the stock gains, producing theoretically unlimited losses — this is not a defined-risk position despite owning the shares.
Manage it by rolling the short calls up and out if the stock approaches the strike, or by buying back one call to revert to a plain covered call. Avoid it into earnings or any event that could gap the stock higher.
Calculate it live
Use the free OptionProfit Ratio Call Write 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.
- A covered call plus an extra naked call — double premium, real risk.
- Peak profit at the short strike; income cushions a small move.
- Uncapped losses above the upper breakeven from the naked call.
- Roll up or buy one back if the stock threatens to break out.
Frequently asked questions
How is this different from a covered call?
A covered call sells one call against 100 shares. A ratio call write sells two, so only one is covered — the second is naked, doubling income but adding uncapped upside risk.
When do I lose money?
On a strong rally. Past the upper breakeven the uncovered short call loses faster than your shares gain, so the position has theoretically unlimited risk to the upside.
Can I make it safer?
Yes — buy back one of the calls to return to a standard covered call, or roll both calls up and out to a higher strike as the stock rises.
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