Covered Calls &
Protective Puts

  Covered Calls

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A single customized order form simplifies these basic options trading strategies so you can trade Covered Calls and Protective Puts with confidence!

Covered Calls and Protective Puts are typically used to help generate potential income or protect a position you already own.

Here's what you need to know.

Collar Order Form Screenshot
What's a Covered Call?

A covered call position is when you sell calls against your long stock position. The strategy is coined "covered call" because as an option seller you are "covered" or protected because of your long position. When you write a covered call, you own the stock and receive a premium for every share "covered" by this contract. However, you also are required to deliver the shares that are "covered" if the option is exercised and your shares are assigned.

What's a Protective Put?

When you purchase a put on a stock you already own, you are using a protective put strategy. In other words, a protective put takes place when you purchase a put option while holding shares of the underlying stock from a previous purchase.

optionsXpress Makes it Easy

We've put together one simple, customized order form for Covered Calls, Protective Puts and Collars. Now, you can mix and match these options strategies without changing screens, so you can spend more time trading and less time navigating. It's a simplified way to place options trades.

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optionsXpress, Inc. makes no investment recommendations and does not provide financial, tax or legal advice. Content and tools are provided for educational and informational purposes only. Any stock, options, or futures symbols displayed are for illustrative purposes only and are not intended to portray a recommendation to buy or sell a particular investment. Advanced options strategies, orders and Extended Hours Trading involve additional risks.

Multi-leg option strategies are subject to multiple commissions. Profits may be eroded by the commission expended to open and close the positions and other risks apply. More information.

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