This topic has been brought up so many times here but I had to bring it up again...
So many times I hear how risky they are, which i do agree, they are.
But what I dont understand is that if one wants to short a particular stock what is the big deal if they sell a naked call option and collect a premium while doing so?
For example.
If i want to sell a naked call option on NVDA at say 100 expiring next week and collect a premium of $500 while doing so and the stock jumps to $115 and i am assigned. Well now I'm assigned at $100 a share along with $500 in premium i collected, so in reality my cost basis if I include the $500 is $105 but it's now trading at 115. So I'm down a $1000
Now if i hold onto that short and wait it out because I'm still believing it's going to drop and it does drop it's a win win....
What am I missing...
I know stocks can go to infinity but if one wants to short a stock what's wrong with selling a naked call???