short call option

Definition

A stock option strategy in which an investor sells a call on shares that are either currently owned (covered call) or not yet owned (naked call). The two types of short calls carry different risks. For a naked call, the breakeven point is the premium received plus the strike price. For a covered call, the breakeven point is the strike price minus the premium.

Use short call option in a sentence

You may decide that the best way to proceed with your new investment is to treat it as a short call option.

​ Was this Helpful? YES  NO 11 people found this helpful.

It was a short call option and I knew it was in the hands of the investor on what would be done next with it.

​ Was this Helpful? YES  NO 2 people found this helpful.

Chad was leveraging a short call option in the hopes that he could make a killing on the newly offered Etsy stock.

​ Was this Helpful? YES  NO 10 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
synthetic stock uncovered call