Covered Calls at Charles Schwab: Takeaways
• Charles Schwab offers covered calls for most account types, including those with limited risk allowances, such as cash and custodial accounts.
• Charles Schwab provides a cost-effective platform for selling covered calls with a per-contract fee of $0.65.
• Schwab's trading platforms offer easy-to-use tools to create and manage covered call strategies.
If you want to trade covered calls at Charles Schwab, many useful features are available to you. Schwab offers various educational resources, platforms, and tools to help you earn passive income from your stock positions using short call contracts.
Covered Call Availability?
Schwab offers covered calls on all of its brokerage accounts as long as the account has been approved for them. Obtaining permission to trade them is easier than nearly all of the other options spreads available at Schwab.
Schwab Covered Calls Cost
The cost of selling call contracts at Schwab is the same as it is for buying them. You won’t see any commissions on options trades, but there is a per-contract fee of $0.65.
The $0.65 fee is charged for purchases and sales. So, you will be charged for each contract when opening a covered call position and again if you choose to close early.
However, there is no fee to close the position if you allow the contracts to expire. Not only are there no contract fees in that case, but you also wouldn’t be charged if the contract were exercised.
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Schwab Covered Calls Minimums and Maintenance Fees
There are no maintenance fees on Schwab accounts, and you don’t have to worry about maintaining a specific account balance. The only requirement for covered calls is owning 100 shares of whichever stock you sell calls against.
Required Risk Level
Charles Schwab offers several risk levels for its options trading service, ranging from Limited Risk to Unlimited Risk. Covered calls belong to the lowest risk level.
Because of the relative safety that covered calls are associated with, nearly all of Schwab’s customers have the option available to them. Schwab customer service will tell you that the option to sell covered calls depends on options Level 0 approval, but the chances of not being approved for Limited Risk are minimal.
Account Types for Covered Call Trading
Due to the low-risk nature of covered calls, this strategy is available in almost all of Schwab's brokerage accounts. Even in accounts with options trading restrictions, such as custodial and cash accounts, writing covered calls is still possible.
Is Schwab Good for Covered Calls?
Charles Schwab is definitely a good broker to use for covered calls. The broker offers a long list of services and tools that help it stand out as one of the top brokers in the US. Here are a few of the main points.
Schwab is a cost-effective broker offering a wide selection of investment products and services. Several account types are available, and the trading platforms range from straightforward to sophisticated, providing investors with whatever level of control they are looking for.
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Updated on 1/1/2025.
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