Single options
Neutral to bearish
Credit
Risk: Undefined: unlimited above the breakeven
Short call (naked)
Also called: Sell call, CE sell, Call writing
Sell a call and collect its premium: keep it if the underlying stays below the strike, with an open-ended loss if it rallies.
Payoff sketch (per unit, index points)
At expiry
Today (7 days left)
Net premium
Credit 108 pts
Max profit
+108 pts (₹7,037 per lot)
Max loss
Unlimited above the chart
Breakeven
25,308
How it works
The seller receives the premium and takes on the obligation to pay the call's value at expiry. If the underlying settles below the strike the call expires worthless and the premium is kept.
The payoff is lopsided: the gain is capped at the premium while a sharp rally produces a loss with no ceiling. Most of the time the option decays; occasionally a gap move costs many months of premium.
When traders use it
- A view that the price will not rise above the strike before expiry.
- Collecting time decay when implied volatility is judged high relative to the moves that follow.
Greeks
| Delta | Negative: the position loses as the price rises, more so as the call moves toward the money. |
| Gamma | Negative: losses accelerate as the price moves toward and through the strike, sharply so near expiry. |
| Theta | Positive: the position earns the option's time decay each day. |
| Vega | Negative: a rise in implied volatility hurts even before the price moves. |
Profit, loss and margin
| Max profit | The premium received, less charges, if the call expires out of the money. |
| Max loss | Unlimited: (settlement − strike − premium) × quantity above the breakeven. |
| Breakeven | Strike + premium received. |
| Margin | SPAN plus exposure margin, similar in size to a futures position for a call near the money; lower for far out-of-the-money strikes. |
In India
- Short options are margined like futures: NSE Clearing's SPAN risk margin plus an exposure margin (2% of notional for index contracts, 3.5% for stocks in Arthfy's model). An at-the-money short option on NIFTY typically blocks well over a lakh of rupees per lot.
- STT is charged on the premium when an option is sold (0.15% of premium from 1 April 2026 in Arthfy's cost model). A short option left to expire, in or out of the money, is not charged STT again at settlement.
- Since 20 November 2024 an extra 2% extreme-loss margin applies to short index options on their expiry day, so a position carried into expiry morning can need more margin than it did the day before.
- Stock options and stock futures are physically settled: an in-the-money stock option held through expiry becomes a delivery of shares (taxed and margined like a delivery trade, on the full value), so brokers often square such positions off in expiry week or raise margins. Index options are cash-settled.
Overnight gaps and event days (results, policy, budget) can move the price past the strike before there is any chance to exit.
Arthfy numbers
Arthfy numbers
Short call: what it did since 2016
0-2 d
3-7 d
8-15 d
16-30 d
31-45 d
Try it in the F&O hub
Opens the tool with this structure on today's NIFTY chain. Reading is free with an Arthfy account; some runs use free attempts.Open in the builderPayoff, Greeks, scenario grid and charges on today's NIFTY chain
Backtest since 2016Daily data, every NIFTY expiry
Replay on expiry daysMinute data since October 2024
Open the option chainLive premiums, IV and Greeks
Related
For education: how the structure works and what it did historically, not a recommendation to trade it.
