back

root strategies

Short Naked Call

Analyzing the risk profile of a short naked call

Recap

  • Short calls carry negative delta
  • Short calls are advantaged by declining IV
  • Short calls profit from the passage of time
  • Short call delta shrinks into profit and grows into loss
  • Short calls have unlimited risk, and limited profitability
  • Short calls have a greater than a 50% of POP

back

root strategies