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The simplest bearish-to-neutral options strategy: sell one call option, uncovered. Maximum profit is capped at the premium received, but risk is genuinely unlimited if the underlying rises.

Sometimes called a "naked call" to distinguish it from a Covered Call, where the seller also owns the underlying. Every Long Call worked example on this site has a Short Call on the other side of the trade — this page explains that other side.

Selling a call option obligates you to sell the underlying at a fixed strike price, if the buyer chooses to exercise. You collect a premium upfront for taking on that obligation. If the underlying stays below your strike, the call expires worthless and you keep the full premium. If it rises well above your strike, your losses grow without limit — there's no cap, since there's no ceiling on how high the underlying can rise.

That's the entire position. This is the exact opposite side of a Long Call — the two positions are mirror images of each other, and every real options trade needs a buyer and a seller, so somebody is always on this side of a call trade.

You collect the premium once, upfront, and that caps your entire possible gain. From there:

1. At or below the strike price — the call has no intrinsic value at expiry, and you keep the full premium.
2. Above the strike price — your loss grows point-for-point with the underlying. Above the breakeven, you're losing more than the premium you collected, with no cap.

This is the mirror image of buying a call: the buyer's capped loss and unlimited profit become, from the seller's side, capped profit and unlimited loss.

A Short Call fits a bearish-to-neutral view — you don't expect the underlying to rise, and want to collect premium from that view. It's most attractive when implied volatility is elevated, since a richer premium widens the buffer before the position turns unprofitable. Given the genuinely unlimited risk, it's rarely used on its own without either strong conviction, active risk management, or being paired with an underlying holding (a Covered Call) to offset the risk.

Suppose Nifty is trading at 24,000 with a weekly expiry coming up, and lot size is 65. You don't expect a rally.

1. Confirm the setup. You're bearish-to-neutral on Nifty and want to collect premium.
2. Sell 1 call at the 24,000 strike (at-the-money), collecting a premium of 145.
3. Calculate your max profit: the full premium received, 145 × 65 = ₹9,425. This is the most you can make, fixed the moment you enter the trade.
4. Calculate your breakeven: 24,000 + 145 = 24,145.
5. Hold the position while Nifty stays below your breakeven.
6. See how it resolves at expiry:
   • Nifty finishes at or below 24,000 → the call expires worthless, you keep the full ₹9,425 premium.
   • Nifty finishes at 24,145 → you exactly break even.
   • Nifty finishes at 25,000 → loss is (25,000−24,000−145) × 65 = ₹55,575, and it keeps growing the further Nifty rises beyond that, with no cap.

Quick reference for the same trade:

Based on the worked example above. Compare this to the Long Call page's diagram, using the same strike and premium — they're mirror images across the horizontal axis. Move the cursor over the chart to see profit/loss at any price.

• This carries genuinely unlimited risk. Unlike almost every other strategy on this site, there is no wing, no long leg, and no cap on the loss if the underlying keeps rising.
• Margin requirements are substantial, reflecting that undefined risk — brokers require significant margin to hold this position, unlike a defined-risk spread.
• Often paired with an underlying holding as a Covered Call specifically to offset this risk — a naked Short Call, on its own, is one of the highest-risk positions covered on this site.
• Index options on NSE are typically European-style and cash-settled — no early-assignment risk before expiry, though the underlying risk on the position itself remains unlimited regardless.