How to Sell Covered Calls in ThinkOrSwim
Gaming
Introduction
Welcome back everybody to this article where we will walk you through the process of selling covered calls using the ThinkOrSwim platform. Covered calls can be a great way to generate extra income from your stock holdings. Let's dive into the steps involved.
In today's tutorial, we will demonstrate how to utilize ThinkOrSwim to sell a call contract. If you are new to call contracts, they offer a way to earn additional income by selling them, provided you first own 100 shares of the underlying stock. Below, we will outline the steps to take within the ThinkOrSwim platform to execute this strategy.
First, if you do not already own 100 shares of the desired company, you will need to purchase them. Once you have acquired the shares, navigate to the trade tab in ThinkOrSwim and access the "All Products" section. Here, you can select the desired expiration date for the option contract chain. Choose a contract that aligns with your goals – for example, if you own shares in Tesla at $ 145 per share, you might consider selling a call contract with a strike price around $ 150 for the upcoming expiration date. By selling the option contract, you are essentially committing to selling your 100 shares of stock at the strike price if the contract is exercised.
Once you have selected the appropriate contract, simply click on the bid column to initiate the sell order. Confirm the details of the order, and upon execution, you will receive the premium for selling the call contract. If the contract expires without being exercised, you keep the premium as profit and can choose to sell another contract in the future.
We hope this guide has been informative and helpful. If you are looking to explore more strategies on ThinkOrSwim or have any questions, feel free to leave a comment below or subscribe to our channel for future tutorials.
Keyword:
- ThinkOrSwim
- Covered Calls
- Selling Options
- Stock Portfolio Management
- Extra Income Strategies
FAQ:
- Can I sell covered calls using ThinkOrSwim without owning 100 shares of the underlying stock?
- How do I determine the strike price and expiration date for selling a call contract in ThinkOrSwim?
- What happens if the call contract I sold gets exercised before expiration?
- Are there any risks associated with selling covered calls on ThinkOrSwim?
- Can I roll over or close out a call contract early on ThinkOrSwim?