Overview

When you've sold a covered call, you can end the position early by placing a "buy to close" order. This means purchasing the same options contract you originally sold, which cancels your obligation and frees up your shares that were previously tied to the position.

Eligible accounts and stocks

We support covered calls on all securities that are eligible for options trading on Wealthsimple. You can trade covered calls in the following account types:

• Registered accounts
• Non-registered margin accounts

Understand order types

When you place an order to buy back an open covered call option (a "buy to close" order), you can choose from different order types:

• Limit order: This order type reflects the maximum amount you're willing to pay for the option's premium. Limit orders are available on the Wealthsimple mobile app and website.
• Market order: This order type purchases the option at the best available price. Market orders are only available on the Wealthsimple website.
• Stop limit order: This order type lets you set a stop price that activates your order and a limit price that sets your maximum acceptable price. This order type is only available on the Wealthsimple website.

Buy to close a covered call

Follow these steps to buy to close a covered call option:

Options trading fees

Wealthsimple automatically charges a per-contract fee on all successful buy and sell orders. This fee varies based on your subscription status. Learn more about options trading fees and taxes.

Related articles

• Enable options trading in your investing account
• Understand options terminology
• Options trading fees and taxes
• Buy a long option
• Sell a long option
• Sell a covered call
• Manage and close options positions
• Use auto-sell for options
• Understand options exercise and assignment
• Trade options in a margin account