It's a bit silly, but I'm trying to foresee everything that can go wrong: 1. I own 100 shares XYZ 2. I write 1 ATM Call, with normal IV (~ 20 - 30%) 3. IV goes to sky, my short option becomes hideously expensive. 4. I'm short this option, so my net liq goes to 0 or negative. Putting aside how unrealistic it is, I'm wondering what will a good broker do? Option is still covered.