The uncovered call write is a risky options trading strategy where the options trader sells calls against stock which they do not own. Also known as naked call writing.
To learn more about this strategy, see Naked Call Writing.
Payoff summary
Maximum profit: The premium received.
Maximum loss: Unlimited as the stock price rises.
Breakeven
Strike price plus the premium received.
Amounts are per share before fees. Multiply by the shares covered by the position; standard equity options usually cover 100 shares per contract. If a maximum profit or loss calculation gives a negative amount, use zero. These figures assume matching contracts held to expiration and do not include financing or early assignment.
Financial mechanics reviewed:
Sources: OIC strategy reference; OIC assignment guidance. Formulas use the stated payoff assumptions; examples are illustrative, not market quotes. Editorial standards and corrections.