Bearish Options Strategies
Learning how to make money in down markets is a critical component to your long-term success rate. The ability to profit when stocks are falling gives options traders a superior edge in the financial markets.
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Custom Naked Call

A custom naked call is a bearish options strategy that combines two strategies, which provides some protection if the stock moves higher. Think of the strategy as entering an iron condor without the long call.
Custom Naked Call
Kirk Du Plessis
Apr 19, 2021

What we call a "custom naked call" is a strategy we don't use too often but we have found success with when we do trade it. With this strategy we like to be fairly bearish on a stock, while also preparing ourselves for an upward move in the short-term. Because our goal is to always create a high probability trade, we will use a combination of 2 different strategies to increase our chances of success. First, we'll sell an OTM put credit spread and might take in a credit of say $0.50 on the sale. We'll then look to match that credit by also selling a naked call above the market for about the same credit. This will double our credit in the trade and help move the break-even point on the strategy much higher (thus increasing our probability of success). Hint: you can also think of this as entering an iron condor without the call side protection.

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Covered Put
A covered put is an options strategy with undefined risk and limited profit potential that combines selling stock with a short put option. Covered puts are used to generate income if an investor is moderately bearish while short a stock.

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