Short Call

A short call is an undefined risk trade where you are selling options above the current market price of the stock anticipating a drop in IV and/or the stock to remain below your strike price. This is one of the key building blocks for income and premium selling strategies because you collect a credit when the trade is entered and typically have a very high probability of success. Short calls are typically frowned upon in the industry because of their "unlimited loss" feature. While we absolutely respect this, we also know that with probabilities and statistics we can calculate the likelihood of that happening very easily, thus making this trade is not as "bad" as you might think.