How To Create a Covered Call Strategy Tutorial on tradeMONSTER

The tradeMONSTER trading platform affords you a quick and easy way to create a covered call strategy, without having you jump through a lot of hoops.

Don’t stress over navigating a complicated plaform while attempting to implement a strategy. Watch this YouTube video for a demonstration on how easy it is write a covered call with tradeMONSTER

Transcript

0:01 Want to acces all the innovative trading tools on tradeMONSTER.com completely
0:05 free?
0:06 Stay tuned to the end of the podcast to find out how.
0:08 <music>
0:21 Welcome to tradeMONSTER.com video trading podcast.
0:24 This is Episode 8, “Creating a Covered Call Strategy”,
0:27 presented by tradeMONSTER’s own
0:28 Travis McGhee.
0:30 This video i’m going to demonstrate a quick and easy way one can go about
0:33 creating a covered call strategy using the tradeMONSTER trading platform.
0:36 You will notice to the left here I have my current positions. For the purposes of
0:39 this demonstration I am actually going to use
0:42 a long stock position that I have in Wells Fargo, WFC.
0:44 Where I am currently long 100 shares of stock. This is for educational purposes
0:48 only.
0:49 What I want to do today is take my long stock position and cover it with a call.
0:53 So I am going to left click on Wells Fargo and it is going to direct me to my quote
0:57 screen.
0:58Here you will notice that you have various selections that you can make. One of
1:01which is the options icon.
1:02 If I were to left click here it would direct me to the Wells Fargo options quote
1:06 screen and I could go about creating my covered call strategy that way, manually.
1:10 But what I want to demonstrate today is how the tradeMONSTER platform can
1:15 actually create the strategy for you.
1:17 So if you go down to the bottom left-hand corner and left click on close/adjust, its
1:21 going to direct you to a new screen where you have five different strategies to
1:26 choose from.
1:27 Seeing as how we are talking about covered calls and covered calls being
1:30 an income producing strategy, we will want to left click on income.
1:33 So what the computer has done is it has automatically matched us up with
1:39 1 Wells Fargo June 2010 28 call.
1:42 Against our long 100 shares of stock.
1:45 It is going to default to the front month, which in this case is June 2010, and the
1:51 at the money strike.
1:52 You can see in the right hand corner where we have a streaming real-time
1:55 quote. Wells Fargo is currently at $27.71.
1:58 So the $28 strike is the at the money.
2:01 Now we can change this to match our needs.
2:03 All we need to do is just go down to the bottom left hand corner.
2:06 Left click on add/edit legs.
2:09 And we can customize our strategy.
2:11 So from this screen, lets say over here at expiry month I wanted to go out.
2:16 I can click on my drop down and change that to July 2010.
2:20 And lets say I wanted to adjust my strike price a little bit I could change that
2:24 to the 30 strike.
2:26 So now I have manually adjusted my strategy to sell 1 July 2010 30 call.
2:32 Against my 100 shares of stock I currently have.
2:35 Now before I go and create this order say you want to analyze your strategy.
2:40 I left click on analyze down here on the bottom.
2:42 What you are going to want to do though, because what you are doing right now is
2:48 analyzing the naked call, so you are going to want
2:51 to analyze the strategy as a whole.
2:53 So left click on adjustment and go to adjusted strategy. And here you
2:58 will be able to see your 100 shares of stock with your 1 short call.
3:02 And essentially look at the covered call strategy.
3:05 So you have here your maximum profit, maximum loss, your break even’s, your
3:10 risk/reward, as well as some important events that you need to watch out for.
3:14 Expiration, next earnings and next dividend.
3:16 So once you are comfortable with the strategy you have on, with the strike and
3:21 expiry month you can go to create order.
3:23 So I left click here, it directs me to a screen.
3:26 Im already long the stock so all I need to do is sell my one call.
3:29 So from here I can sell my 1 Wells Fargo July 2010 30 call and I can adjust it for
3:35 price.
3:36 If I wanted to be in between you can see that the current bid is .53 and offer is .54.
3:40 I can either sit on the bid or take the offer. Or I can change this to a market order.
3:45 Whatever works best for you.
3:48 And then you would just go and confirm your trade.
3:50 And that is how you go about creating a covered call strategy using the
3:52 tradeMONSTER trading platform.
3:54 Go to tradeMONSTER.com to get access to all of our tools and educational
4:00 resources for proactive investors like you.
4:03 Every brokerage account gets free access to our paper trading practice platform!

0 Users Collected

Post Topics

Post Details

Download Our Free eBook

25 Stock Market Indicators To Know

And subscribe to our MarketHeist Guides newsletter!

Using This Post

Resources To Use

Tools, products, and resources for use with this topic.

More Content

Keep exploring the markets with these topics.

Free Brokers, Software, & Tools to Start.

Start with Brokers that have free accounts and professional grade software. Software that's the same whether you're practicing with fake money or trading real money.

Submit a Service

Avatar Image

TD Ameritrade Online Broker

With free thinkorswim, Trade Architect, & mobile software. Practice with virtual money. Invest and trade in stocks, ETFs, mutual funds, bonds, options, futures, and forex. No minimum and no maintenance fees. $0 to start.

☆ Collect Launch

Avatar Image

tradeMONSTER Online Broker

Free browser & mobile software. Easy to use technology including strategySeek and paperTRADE. Invest and trade in stocks, ETFs, mutual funds, bonds, and options. No minimum and no maintenance fees. $0 to start.

☆ Collect Launch

Avatar Image

optionsXpress Online Broker

optionsXpress offers an innovative suite of online brokerage services for investor education, strategy evaluation and trade execution. No minimum requirements.

☆ Collect Launch

Learn The Business. Take A Course.

What is the market and how it works
Finding Opportunities (with Technical Analysis & Fundamental Analysis)
Planning & Safety (with strategies to make smart decisions.)
Plan Execution: Buying & Selling

Submit a Service

Learn Stocks

Avatar Image

Investools Investing Foundations Program

Get trained in the foundations of the stock market and stock trading with two courses, a wealth of easy-to-use tools, and top-tier coaching support, in the program that helps you start managing your own portfolio. In the Investing Foundation Program, you’ll enjoy live and online workshops that can help you quickly overcome fears and learn [...]

☆ Collect Launch

Learn Options

Avatar Image

OptionsAnimal Apprentice Options Education Program

Description Build your knowledge from the ground up. Understand key concepts and learn the basic spread trades that will give you a foundation to trade successfully. Learn how to properly structure a trade using the Protective Put, Covered Call, Collar Trade as well as applying the Straddle/Strangle. Trade Adjustment Spread Trades OptionsAnimal Trader Professional Program [...]

☆ Collect Launch

Learn Futures

Avatar Image

OpenTrader Professional Training Program

The industry’s only training program built by professional full-time traders. You used to have to get hired by a professional trading firm to get world-class training. Not anymore. If you’ve been a losing trader, getting beaten down by the market again and again, low on confidence and full of doubt, things are about to change [...]

☆ Collect Launch

On-The-Job Training. Earn While Learning.

Follow Live Trades, Step By Step
Detailed Trade and Market Analysis
Explanations of Strategies and Tactics
Questions Answered in Webcasts & Chatrooms
Learn by Copying The Pros At Every Step

Submit a Service

Learn Stocks

Avatar Image

Mish’s Market Minute Premium Stock Picks Video Subscription

Live-in-the-market instruction showing you how to trade in the afternoon the choice stock and ETF picks vetted by MarketGauge’s tools earlier in the day. Video up to 15 minutes: 4 times a week (M/T/W/Th) by 1:30PM ET $124.97/month Includes ETF Monitor & Nuggets List Private real-time Twitter Alerts 2 week FREE trial Learn as Mish: [...]

☆ Collect Launch

Learn Options

Avatar Image

stockguy22 Live Trading & Education for Part Time Traders

What You’ll Get Learn stocks and options trading at your own pace from a group of full time traders dedicated to teaching through live trading, education, and mentoring.  See how trading is done methodologically as an occupation on a daily basis, from beginning to end.  Start with the daily in-depth analysis of stocks, the overall [...]

☆ Collect Launch

Learn Futures

Avatar Image

Emini Wizard Trading System & Live Trading Chat Room

Thanks for considering The Emini Wizard System: This system is available for purchase for people who want to make a one time investment for the entire program. You get: Access to the Member’s website Spreadsheets Common plays Special plays Trade logic explained Chart patterns Chart settings we prefer Separate active chat area (30 days free [...]

☆ Collect Launch

Some Partners We've Worked With

  • Download Our Free eBook

    25 Stock Market Indicators To Know

    And subscribe to our MarketHeist Guides newsletter!