The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about when to sell a call option. A short naked call option is a very basic option selling strategy whereby you just simply sell a call option at a strike price that’s either at or above where the underlying stock is trading at the time. Now, again, it’s a little bit more of an advanced strategy in the sense that it carries a lot more risk than a traditional spread that you might be trading. With a call option strategy where you’re short the option contract, you’re going to be carrying a lot more margin and you have undefined risk given the fact that the stock or underlying security could continue to rise against your position in the future. Therefore, of course, we always suggest you keep these option strategies to a minimum and balance them out with other existing neutral and other existing bullish strategies in your portfolio. All that being said, when we sell a call option, we gener