Short Call

Description

Selling a Call option, expecting the price not to rise.

Trading Logic

Earn premium. Unlimited risk if the stock price spikes.

Practical Example

Stock at $100. Sell a $110 Call for $2 premium.

P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss