Covered Call

Use the Covered Call order entry screen to enter both a stock and a call order. If you already own the stock, use the basic option screen.

In this strategy you are selling a Call and at the same time an equivalent number of shares of the underlying stock. Your objective is to earn income in neutral markets. If the stock is purchased simultaneously with selling the Call, the strategy is commonly referred to as a "buy-write". Here is how a profit / loss chart looks for this strategy. Click here for more information.

How to enter a Covered Call

At TradeKing you can easily enter a Covered Call / Buy-Write order from one screen. The order consists of two "legs", and, consequently, two orders subject to two $4.95 ticket charges.

You can enter a Covered Call order directly from the Covered Call screen or by choosing your strategy from the spread chain under "Option Chains":