When selling a naked call option, the investor is exposed to unlimited upside risk, meaning that the price of the underlying asset can rise indefinitely, resulting in an unlimited potential loss. This is because the investor is obligated to sell the asset at the fixed strike price, regardless of how high the market price rises.

Here's an example:

- An investor sells a naked call option on a stock with a strike price of $50.

- The market price of the stock rises to $75, then to $100, then to $150, and so on.

- The investor is still obligated to sell the stock at $50, even though its market value is now much higher.

- The potential loss for the investor is unlimited, as the market price can continue to rise indefinitely.

This unlimited upside risk is a key characteristic of selling naked calls, and it's what makes this strategy so risky. It's essential for investors to understand this risk and to have a thorough risk management plan in place before engaging in this type of trading strategy.