How to Screen for Covered Calls Using Fidelity Active Trader Pro: Step-by-Step Guide

The Short Answer: Yes, Fidelity Active Trader Pro Has a Built-In Options Screener

You can screen for covered call candidates directly inside Fidelity Active Trader Pro using the platform's Options Screener tool. Open the tool, filter by stock you already own or plan to buy, set your strike and expiration criteria, and sort results by premium yield. The whole process takes under five minutes once you know where the controls are.

This guide walks you through every step, explains what each filter actually means, and shows a real example using Apple (AAPL) so you can copy the logic on your own positions.

What You Need Before You Start

Active Trader Pro is Fidelity's free desktop platform. You need a Fidelity brokerage account with options trading enabled. If you have not applied for options, log into Fidelity.com, go to Account Features > Brokerage & Trading > Options, and request Level 1 approval. Level 1 covers covered calls. FINRA Rule 2360 requires brokers to verify that options are suitable for each customer before granting access, so expect a short questionnaire about your experience and net worth.

You also need to own at least 100 shares of the underlying stock for each contract you plan to sell, or be buying shares at the same time. One standard equity options contract covers exactly 100 shares, as defined by the Options Clearing Corporation (OCC).

Download and install Active Trader Pro from the Fidelity website if you have not already. The screener we are using does not exist in the browser-based platform — you need the desktop app.

Opening the Options Screener in Active Trader Pro

Once Active Trader Pro is open, follow these steps:

1. Click the Research & News menu at the top of the screen. 2. Select Options from the dropdown. 3. Click Options Screener. A new panel opens with filter categories on the left and results on the right.

Alternatively, use the search bar at the top and type 'Options Screener' to jump directly to the tool.

The screener defaults to showing all option types. Your first job is to narrow it down to calls only, which you will do in the next step.

Setting the Right Filters for Covered Calls

Here is the filter sequence that works best for covered-call sellers. Work through them in order.

**Option Type:** Set to Call. You are selling calls, not puts.

**Expiration Range:** Most covered-call sellers target 20 to 45 days to expiration (DTE). This range captures the steepest portion of time decay, known as theta. The Options Industry Council (OIC) publishes educational material confirming that theta accelerates most in the final 30 days of an option's life. Set the expiration filter to show contracts expiring 21 to 45 days out.

**Moneyness / Strike Offset:** Filter for out-of-the-money (OTM) calls, typically 2% to 7% above the current stock price. OTM calls let the stock rise before you get called away, while still paying meaningful premium. If you want more premium and are comfortable capping upside tightly, go 1% to 3% OTM. If you want more room to run, go 5% to 8% OTM.

**Delta:** Set the delta range to 0.20 to 0.35. Delta here is a rough probability proxy — a delta of 0.25 means the market implies roughly a 25% chance the option expires in the money. Lower delta means less assignment risk but also less premium. The OIC defines delta as the rate of change of an option's price relative to a one-dollar move in the underlying.

**Open Interest:** Set a minimum of 500 contracts. Low open interest means thin markets, wide bid-ask spreads, and poor fills. For large-cap names like AAPL or MSFT, open interest in the thousands is normal.

**Bid-Ask Spread:** Filter for spreads under $0.10 or under 5% of the midpoint price. Wide spreads eat your premium before you even place the trade. FINRA reminds retail investors that the bid-ask spread is a real transaction cost, even though it does not show up as a commission line.

**Implied Volatility (IV):** This is optional but useful. Sort results by IV or add a minimum IV filter of 20%. Higher IV means higher premium. Just remember that high IV often signals that the market expects a news event — earnings, a product launch, a macro report — that could move the stock sharply. Selling calls into earnings carries extra risk (see the risks section below).

Worked Example: Screening AAPL for a 30-Day Covered Call

Let's say it is a typical trading day and AAPL is trading at $213.50. You own 100 shares. You want to sell one covered call expiring in roughly 30 days, targeting a delta between 0.20 and 0.30 and a strike 3% to 5% OTM.

3% above $213.50 = $219.90, so the nearest standard strike is $220. 5% above $213.50 = $224.18, so the nearest standard strike is $225.

You run the screener with those parameters. The results show:

- AAPL $220 Call, 32 DTE: Bid $2.15, Ask $2.20, Delta 0.28, Open Interest 12,400, IV 24% - AAPL $225 Call, 32 DTE: Bid $1.05, Ask $1.10, Delta 0.18, Open Interest 9,800, IV 23%

The $220 strike pays a midpoint of $2.175 per share, or $217.50 per contract (100 shares × $2.175). That is a 1.02% return on the $213.50 stock price in 32 days, or roughly 11.6% annualized if you can repeat it monthly.

The $225 strike pays $1.075 per share, or $107.50 per contract — about half the premium, but you keep upside to $225 instead of $220.

You click the $220 row in the screener, which opens the options chain. Verify the bid-ask spread ($0.05 here — excellent), check that no earnings are scheduled before expiration (use the Fidelity earnings calendar in the Research tab), then click Trade to pre-populate an order ticket. Set the order type to Limit at the midpoint ($2.175) or one cent below the ask. Do not use market orders on options — the spread will cost you.

Once filled, your maximum gain on this trade is $217.50 in premium plus any stock appreciation up to $220. Your breakeven on the downside drops from $213.50 to $211.325 ($213.50 minus $2.175 premium received).

Risks You Need to Understand Before Selling Any Call

Covered calls are considered one of the lower-risk options strategies, but they are not risk-free. Here are the real risks, stated plainly.

**Capped upside.** If AAPL jumps to $240 before expiration, you still sell at $220. You miss $20 per share of gains. This is the biggest complaint from covered-call sellers in strong bull markets.

**Stock still falls.** The premium you collect reduces your loss but does not eliminate it. If AAPL drops from $213.50 to $190, you lose $23.50 per share minus the $2.175 premium — a net loss of $21.325 per share. The option expires worthless, but the stock loss is real.

**Early assignment.** American-style equity options can be exercised at any time before expiration, not just at expiry. The OCC processes early assignments overnight. If your call goes deep in the money, especially just before an ex-dividend date, you may be assigned early and have your shares called away sooner than expected. The OIC has a detailed explainer on early assignment risk that is worth reading before your first trade.

**Earnings risk.** Implied volatility spikes before earnings announcements, which inflates premiums. That looks attractive, but the stock can move 8% to 15% in either direction on earnings. Selling a call just before earnings means you cap your upside right when a positive surprise could send the stock sharply higher. Many experienced covered-call sellers avoid initiating new positions in the week before an earnings date.

**Tax treatment.** In the United States, the IRS treats premiums received from selling covered calls as short-term capital gains in most cases, regardless of how long you have held the stock. Selling a call can also affect the holding period of your shares for long-term capital gains purposes — specifically, if you sell an in-the-money call, the IRS may suspend the holding period clock on your shares. Consult a tax professional or review IRS Publication 550 for details. Canadian investors should note that the CRA has its own rules on options income; review CRA Interpretation Bulletin IT-479R before trading.

**Liquidity risk.** Thinly traded options have wide bid-ask spreads. The screener filters above (open interest above 500, spread under $0.10) are designed to keep you in liquid names. Stick to them.

How to Save Your Screener Settings and Build a Watch List

Active Trader Pro lets you save custom screener configurations so you do not have to re-enter filters every session. After setting your filters, click Save Screen at the top of the Options Screener panel. Name it something like 'CC 30-Day OTM Delta 25' so you can find it later.

For stocks you already own, build a dedicated watch list. Go to Quotes & Watch Lists, create a new list called 'My CC Candidates,' and add your holdings. Each time you open the screener, you can cross-reference the results against this list to quickly spot which of your positions has the best call-selling opportunity right now.

Run the screener at least once a week, ideally on Monday morning before the market opens and again on Wednesday after any Fed or macro news. Option premiums shift with volatility, so a strike that looked unattractive on Monday may look much better by Wednesday if the VIX has moved.

Quick Checklist Before You Place the Trade

Use this checklist every time:

1. Do you own 100 shares per contract? Confirm in your positions tab. 2. Is the expiration 21 to 45 days out? Check the DTE column. 3. Is the strike 2% to 7% OTM? Calculate from the current quote. 4. Is delta between 0.20 and 0.35? Read from the options chain. 5. Is open interest above 500? Check the OI column. 6. Is the bid-ask spread under $0.10? Verify before submitting. 7. Are earnings scheduled before expiration? Check the Fidelity earnings calendar. 8. Are you using a limit order at or near the midpoint? Never use market orders on options. 9. Have you noted the tax implications for your situation? Review IRS Publication 550 or CRA IT-479R as applicable.

If all nine boxes are checked, you are ready to submit the order.

Does Fidelity Active Trader Pro have a built-in covered call screener?

Yes. Active Trader Pro includes an Options Screener under the Research & News menu. You can filter by option type, expiration, delta, open interest, and implied volatility to find covered call candidates. The screener is only available in the desktop app, not the browser-based Fidelity.com platform.

What delta should I target when selling covered calls?

Most covered-call sellers target a delta between 0.20 and 0.35 for a balanced trade-off between premium collected and the probability of assignment. A delta of 0.25 implies roughly a 25% chance the option expires in the money, according to the Options Industry Council. Lower delta means less premium but more room for the stock to rise before you get called away.

How far out-of-the-money should my covered call strike be?

A common starting range is 3% to 5% above the current stock price. This gives the stock room to appreciate while still generating meaningful premium. If you want higher income and are comfortable with tighter upside, go 1% to 2% OTM. If capital gains on the stock matter more to you than premium income, go 6% to 8% OTM.

Can I get assigned early on a covered call?

Yes. U.S. equity options are American-style, meaning the buyer can exercise at any time before expiration. The OCC processes assignments overnight. Early assignment is most likely when the call is deep in the money or just before an ex-dividend date, because the buyer may exercise to capture the dividend. The Options Industry Council has free educational material on early assignment risk.

How are covered call premiums taxed in the US and Canada?

In the United States, the IRS generally treats covered call premiums as short-term capital gains, and selling an in-the-money call can suspend the long-term holding period on your shares — see IRS Publication 550 for details. In Canada, the CRA treats options income differently depending on whether you are considered a trader or investor; CRA Interpretation Bulletin IT-479R covers the rules. Always consult a qualified tax professional for your specific situation.

What minimum open interest should I require when screening covered calls?

A minimum of 500 contracts of open interest is a reasonable floor for retail traders. Higher open interest generally means tighter bid-ask spreads and better order fills. For large-cap stocks like AAPL, MSFT, or NVDA, open interest in the thousands is normal, and you should expect spreads of $0.05 to $0.10 on near-the-money strikes.