A small premium up front, and no ceiling on what you can lose. This lesson shows what selling a naked call really signs you up for.
After this lesson you can
- Work out a naked call's breakeven, and what every dollar above it costs you
- Explain why the margin requirement grows as the stock rises, and what triggers a margin call
- See why an overnight gap skips straight past a stop, and what assignment leaves you holding
- Size a trade by what a gap would cost, not by the odds of a loss
- Know the five mistakes, including the most dangerous one: trusting a high win rate
Chapters
- 0:00Same call, no shares
- 1:44What naked means
- 3:25What it pays at expiration
- 5:43Margin, and why it moves
- 7:56Gaps and assignment
- 9:55Managing the risk
- 12:17Choosing strike and expiration
- 14:13Five mistakes
- 16:01The whole lesson on one screen
Practice in the game: Level 4 · The Ceiling