Selling (or writing) a call option exposes an investor to substantial, theoretically unlimited financial risk and potential capital losses. When an investor sells a call option, they collect an upfront cash premium but take on the obligation to sell the underlying stock at the predetermined strike price if the buyer exercises the contract. If the market price of the underlying stock rallies aggressively far above the strike price, the seller must purchase shares at high open-market prices to fulfill delivery obligations, resulting in losses that can vastly exceed the initial premium collected.