Trade Logic Unlocked

Why We Don’t Sell Naked Calls

Trade Logic Unlocked

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

As we’ve demonstrated many times before, undefined-risk strategies are superior to defined-risk strategies, in terms of greek exposure, probability and profit, and consistency. Still however, there are some undefined-risk strategies you don’t see us implementing too often, such as the Naked Short Call.

Why is that? In today’s Trade Logic Unlocked, we offer up two reasons: positive drift and volatility skew.

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