My bad my bad. Here it is. My original post was all over the place. Heres how it should read. Long one 6 month ATM call at 100 for $5pt and Short one 12 month OTM call at 130 for $5 pt Mark showed me this was the equivalent after I gave him the right numbers The other scenario would be : Long one 3 month ATM call at 100 for $5pt and Short two 3 month OTM calls at 110 or $2.50 each. How do I avoid the naked calls risk other than purchasing a call option above the two 110 calls I sold. There has to be a quick adjustment somewhere for this situation
Are those figures accurate? The ATM calls seem too cheap. The OTM price appears to be OK. Which stock is this ? forex-forex --- Option Guru
The short call is either naked or its covered. Covered means owning shares of the underlying or an equal number of long calls. That doesn't necessarily solve your problem of mitigating the risk but it cures nakedness
LOLOL.. Don't sweat it. The stats in the chain were bad from the start. Asd was just practicing his typoese I'm off to set up for the opening of the Gambling Channel at 9:30 AM. Later.