Selling a Covered Call on Paper Trading

What is a covered call?

Selling a covered call is a single-leg option strategy in which the stock (or ETF) is purchased and calls are sold on a share-for-share basis. The goal of the strategy is to collect income with a neutral to moderately bullish outlook.

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Why should you try paper trading?

New to options trading

Some people have a basic understanding of options trading but little or no options trading experience. By selling a covered call on your demo account, you can familiarize yourself with:

• How to read an option chain on Webull.
• How to place an order.
• How to analyze your profit and loss of the covered call strategy.

Practicing with a paper account before using real funds can help you build confidence and gain experience with complex strategies

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Limited experience

Some investors may have tried covered calls before but ended up in a loss. The paper trading function can provide an excellent opportunity to review your trading skills. Through practice on the demo account, you can answer questions like:

• What do I do when things go wrong?
• Should I exit the position early?
• Should I roll out the position?

Getting in the habit of reviewing the details of your trading process can help you gain a comprehensive understanding of the strategy. Just remember, experience comes from practice.

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How to start with paper trading?

You can access the paper trading page and tap the "Option Trade" icon to start your options paper trading journey!

Step 1: Search the underlying security and tap on the option chain page.

Step 2: Choose the "Covered Stock" strategy and "Calls" side.

Step 3: Choose the expiration date and strike price.

Step 4: Click the contract to go to the order screen and place the order.

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‌* The covered call strategy on paper trading only supports simultaneous buying shares and selling calls. Selling calls on your stock previously bought is not available for now. Thanks for your understanding.