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Outright Calls
An outright or naked call position is a long or short position in a call without any other offsetting position such as a position in the underlying stock or another option.
A long call position has risk that is limited to the price paid for the call option. A naked short call position has theoretically unlimited risk since the underlying stock could appreciate infinitely.
Retail option traders are cautioned that selling naked calls is extraordinarily risky.
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An outright or naked call position is a long or short position in a call without any other offsetting position such as a position in the underlying stock or another option. A long call position has risk that is limited to the price paid for the call option. A naked short call position has theoretically unlimited risk since the underlying stock could appreciate infinitely. Retail option traders are cautioned that selling naked calls is extraordinarily risky.
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