OPTIONS — SELL CALLS AND PUTS
Sell Call / Sell Put
Analyse an uncovered short call or a short put: premium received, obligation, break-even, assignment, maximum loss and optional cash securing for the put.
Inputs
Field guide ↗Premium received is not free profit: it is compensation for the obligation assumed by writing the option.
An uncovered SELL Call has theoretically unlimited loss if the underlying keeps rising.
If you own enough shares to cover the written call, use Covered Call so the shares and call are evaluated as one position.
Trade Math does not calculate broker margin for short positions. Margin depends on broker, account, market, underlying and current conditions.
American-style options may be assigned before expiration. The chart shows expiration payoff and does not remove early-assignment operational risk.
Tax is a simplified estimate applied to positive displayed results and does not model assignment-specific tax treatment, received securities or offsets.
Before expiration, option value also depends on time remaining, implied volatility, rates, dividends, spreads and liquidity. Early close uses the buyback premium entered by the user.
Written option summary
Written option profit and loss at expiration
The chart shows the received premium as the maximum profit and the growing obligation as the option moves in the money.
Profit zone
Loss zone
Expiration scenarios
| Underlying | Status | Obligation | P/L before tax | Net P/L |
|---|
Option buyback
Enter the current buyback premium to simulate an early close.
SELL Put cash securing
Enter the cash you intend to reserve to check whether it covers the modelled assignment.