LEARN: Naked Call

It’s an option strategy in which an investor writes ( sells) call options on the open market without owning the underlying security.

The upside of this strategy is that the investor could receive income in the form of premiums without putting up a lot of capital.

Though it is risky as there is limited upside potential should the stock rise above the exercised price of the options that are sold. 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s