How to Enter a Covered Call on Thinkorswim Step by Step

To enter a covered call on Thinkorswim, start by logging into your account and navigating to the "Trade" tab. From there, select the "Covered Call" option from the drop-down menu.

You'll then need to choose the stock you want to sell a call option on, and select the specific call option you're interested in. This can be done by typing the stock symbol into the search bar or browsing through the available stocks on the platform.

Next, determine the number of shares you want to sell the call option on, and enter the quantity in the "Quantity" field. You can also set a limit price for the option to ensure you get the price you want.

Once you've entered the necessary details, review the order summary to ensure everything is correct before submitting the trade.

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 start with the basics - you'll need to own 100 shares of the underlying stock to sell a call contract. If you don't already own the shares, you'll need to purchase them first.

ThinkOrSwim makes it easy to execute this strategy, and we'll outline the steps to take within the platform. To get started, navigate to the trade tab and access the "All Products" section.

Here, you can select the desired expiration date for the option contract chain. 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're essentially committing to selling your 100 shares of stock at the strike price if the contract is exercised.

Thinkorswim is a powerful trading platform that allows you to trade options with ease.

You can access the options trading screen by clicking on the "Trade" tab and selecting "Options" from the dropdown menu. Thinkorswim offers a range of options trading tools and features to help you make informed trading decisions.

In the Thinkorswim tutorial video, Coach T walks the team through how to use the risk graph for options trading.

The risk graph is a visual tool that helps you understand the potential risks and rewards of an options trade. It's a game-changer for beginners who want to manage their risk effectively.

Thinkorswim's risk graph allows you to see the potential losses and gains of a trade in real-time. This feature is incredibly useful for making informed decisions.

To use the risk graph, you'll need to have a solid understanding of the options trading basics. Fortunately, Thinkorswim provides a wealth of resources to help you get started.

Coach T's tutorial is an excellent place to start, covering the fundamentals of risk graph basics in a clear and concise manner.

To trade options on Thinkorswim, you need to understand the different types of options contracts, such as calls and puts, which can be bought or sold.

Thinkorswim offers a variety of options trading tools, including the Options Chain, which provides a list of available options contracts for a particular underlying stock or ETF.

To place a trade, you'll need to select the underlying stock or ETF, the strike price, and the expiration date of the options contract. Thinkorswim's Options Chain makes it easy to find these details.

You can also use the Options Scanner to filter options contracts based on specific criteria, such as volatility or time to expiration. This can help you find the best options trades for your strategy.

Thinkorswim's trading platform allows you to place trades in just a few clicks, and you can also use the platform's advanced tools, such as the Order Ticket, to customize your trades.

To enter a covered call on Thinkorswim, you'll need to choose a trading strategy that aligns with your investment goals and risk tolerance.

A popular strategy is to sell calls on stocks that have a high probability of remaining stable, such as those with a low volatility or a stable earnings history.

The article mentions that the Thinkorswim platform offers a "Covered Call" option under the "Options" tab, where you can select the stock and choose the expiration date for the call option.

Consider selling calls on stocks that have a high dividend yield, as this can increase the likelihood of the stock remaining stable.

To determine the strike price for your covered call, you can use the Thinkorswim platform's built-in tools, such as the "Options Chain" feature, which shows the available strike prices and their corresponding premiums.