Short Call
Components
A short call is simply the sale of one call option. Selling options is also known as "writing" an option.
Short Call
A bearish strategy that involves selling a call option to collect the premium. ...
Short Put ...
A short call option that gives the buyer the right to purchase the underlying security at a pre-determined price that is collateralized by the call writer who actually owns the underlying security. Also called covered call writing.
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A short call or put option position which is not covered by the purchase or sale of the underlying futures contract or physical commodity.
Underlying Futures Contract ...
A short call option position in which the writer owns the number of shares of the underlying stock represented by the option contracts.
A short call position combined with a long put of the same series.
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Technical analysis ...
A short call option position in which the writer does not own an equivalent position in the underlying security represented by his option contracts.
Uncovered Option ...
Synthetic Short Call: A short put and a short stock or future.
Synthetic Short Put: A short call and a long stock or future.
Synthetic Short Stock: A short call and a long put.
Those who go short calls are generally down on the stock's prospects, at least until expiration. In isolation, those who go short calls are playing with fire with that potential unlimited downside.
UNCOVERED CALL A short call option position in which the writer does not own shares of underlying stock represented by his option contracts.
A short put and a short call or a long put and a long call with the same expiration date and different strike prices.
Butterfly ...
A short call option position where the writer sells a call option while simultaneously owning the number of shares represented by the option contracts.
Covered Call
A short call option position against a long position in an underlying stock or futures.
Covered Put
A short put option position against a short position in an underlying stock or futures.
naked call A short call option position in which the writer does not own the corresponding... naked option See uncovered option. naked position The holding of unhedged securities against market risk.
Box: A long call and a short put at one exercise price, and a short call and a long put at a different exercise price. All four options must have the same underlying entity and expire at the same time.
Combination Spread A broad term used to describe positions consisting of an equal number of long calls and short puts or long puts and short calls. Combinations often have different strike prices and/or expirations.
Short straddle : A compound option that consists of a short CALL and a sh...
Short strangle : A compound option that consists of a short CALL and a sh...
Short-Short Position : A shortage of assets in a particular currency. See...
Related: Markowitz diversification Naked strategiesAn unhedged strategy making exclusive use of one of the following: long call strategy (buying call options), short call strategy (selling or writing call options), ...
(Source: Australian Financial Review Dictionary of Investment Terms.) Zero Gain Collar A Costless Collar (q.v.) consisting of a short Call (q.v.) and long Put (q.v.), where the short Call's strike is ATM (q.v.).
Feeling very confident and thinking it would be smart to be diversified, he enters a long position in silver futures, and also sells short Call options of wheat which he is sure is headed down.
That is, a short call is covered if the underlying stock is owned, and a short put is covered (for margin purposes) if the underlying stock is also short in the account.
Options: There are four basic option trades:Long call - you have the right but not obligation to buy an asset at an agreed price on a future dateShort call - if the long call holder exercises the option to buy, ...
Usually, when setting up a collar (long stock + short call + long put), you write a near-the-money call on stock that you own and buy an out-of-the-money (i.e. lower strike) put on this same stock.
A short Call is Covered if the underlying security is owned. A Short put is covered if the underlying security is also short in the account.
A compound option strategy that consists of a number of long calls with lower strike prices and a larger number of short calls with a higher strike price. The maximum profit is realized when the currency price is at the higher strike price.
The structure of an uncovered call is essentially a short call option position that is assured by the working arrangement with the broker, and the broker's estimation of how much of a margin the investor can reasonably afford to carry.
Covered Option: A short call or put option position that is covered by the sale or purchase of the underlying futures contract or other underlying instrument.
Max profit occurs when the stock closes at 65 - the short calls expire worthless; you keep the entire premium; the long 60 call gets sold for a for a small profit; and the long 70 call expires worthless.
If prices were to rise to $25 per barrel, and you had not offset your short call, (by placing an order with your broker to buy it back) the owner of the call could exercise his right to buy (which you sold him) crude at $23.
An unhedged strategy making exclusive use of one of the following: Short call strategy (selling or writing call options), and short put strategy (selling or writing put options).
An options trader can be a long Call or a short Call. In the first case, the trader has bought the call contract and has the right to exercise it.
Conversion: A strategy in which a long put and a short call with the same strike price and expiration are combined with long stock to lock in a nearly risk less profit.
Call profit/loss - For a long call, equal to the call value minus the premium. For a short call, equal to the premium minus the call value.
Call value - At expiration, equal to the futures price minus the strike price of the call.
This strategy is sometimes referred to as an "uncovered call" or a "short call".
Naked Option
An option position where the buyer or seller has no underlying security position.
An option position in which the owner establishes a long call and a short put at one strike price and a short call and a long put at another strike price, all of which are in the same contract month in the same commodity. See also: Arbitrage
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You will exercise your long call and your short call will be assigned. They cancel each other out leaving you with no residual position. This scenario occurs when the stock price closes lower than the lower strike call involved in the spread.
The iron condors break even points equal the strike price of the short call plus the premium received or the strike price of the short put less the premium received.
If the price of the stock jumps up to $45, the investor must provide 100 shares to the buyer of the short call at $35.
[NYMEX] box transaction An option position in which the holder establishes a long call and a short put at one strike price and a short call and a long put at another strike price, all of which are in the same contract month in the same commodity.
Covered: A written option is "covered" if the writer also has an opposing market position in an underlying stock/security on a share-for-share basis. A short call is covered if the underlying security is owned (a buy-write), ...
For example, you could sell a bond with a short call, e.g., five years, and purchase a bond with 10 years of call protection.
A three-legged option spread in which each leg has the same expiration date but different strike prices. For example, a butterfly spread in soybean call options might consist of one long call at a $5.50 strike price, two short calls at a $6.
Synthetic Stock - An option strategy that is equivalent to the underlying stock. A long call and a short put is synthetic long stock. A long put and a short call is synthetic short stock.
A synthetic long futures position is created by combining a long call option and a short put option for the same expiration date and the same strike price. A synthetic short futures contract is created by combining a long put and a short call with ...
The value of this short call option, along with any other short options, are shown in the trader's account statement under a separate section called Short Option Value. This value is subtracted from the final account value or liquidity value.
 See also: Short, Option, Call, Options, Long
  
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