Frequently Asked Questions

How a Covered Call Option works

A covered call pairs stock you already own with a call option you sell on that same stock. You collect premium up front. If the stock stays at or below the strike by expiration, you keep both your shares and the premium. If the stock rises above the strike and you’re assigned, you sell your shares at the strike price; your upside is capped, while the premium adds a small cushion on the downside. Normal stock risk remains.

Long call vs. short call

• Long call (you buy a call): You purchase the right, not the obligation, to buy shares at the strike before expiration. Risk is limited to the premium paid; potential upside can be significant if the stock rises enough to exceed the premium cost. Time decay works against you.
• Short call (you sell a call): You take on the obligation to sell shares at the strike if assigned. You receive premium up front and benefit if the stock is flat or declines. Time decay works in your favor. When the call is “covered,” you already own the shares—this caps your upside but avoids the unlimited risk of an uncovered short call.

Market makers vs. retail investors

In most public options trades, a market maker stands on the other side of a retail order. Rather than holding a fixed 100 shares for every call they sell, market makers dynamically hedge—buying or selling only the number of shares needed to offset the option’s risk (delta) as prices move. This hedging, together with bid–ask spreads and the relationship between implied and realized volatility, is what drives their economics. When realized volatility runs lower than what the option’s price implied, the hedging program tends to produce a net gain; when realized volatility runs higher, those gains can shrink or turn negative.

Toll Booth customers typically treat their stock positions as long‑term holdings and do not trade shares intraday as a hedge. Selling covered calls in this context is best viewed as monetizing an underutilized asset—the shares you already own—to generate systematic income, not as an arbitrage strategy.

What does the Covered Call bot do?

It automates opening, rolling, and closing covered calls on your existing equity positions based on your preferences.

How does pricing work?

Flat $100 per month per account. No performance fees, no hidden charges. See the full details on the pricing page.

Can I cancel anytime?

Yes. Subscriptions are month-to-month. You can cancel at any time and the service will stop at the end of your billing period.

Which brokers are supported?

We currently integrate with Schwab for live trading. Additional broker support may be added over time.

How do you manage risk?

Rules-based checks manage buying power, DTE, and roll/close thresholds. You can see the rules in the Get Started and resources pages.

How do I get started?

Click Get Started to create your account, connect your brokerage, and follow the onboarding steps.

Who is Toll Booth designed for?

Toll Booth is designed for both individual investors and professional advisors. For RIAs and wealth managers, Schwab provides a separate institutional API that can be used to manage client accounts programmatically.

What happens if Toll Booth shuts down or loses access to the Schwab API?

If Toll Booth loses access to the Schwab API for any reason:

Existing automations:
Toll Booth will no longer be able to place new orders on your behalf. All automation that depends on the Schwab API will effectively stop.

Open short call positions:
Your existing positions remain in your Schwab account. If you do not manually place closing or rolling orders, those positions will either:

• Expire worthless, or
• Be assigned, depending on where the underlying is at expiration.

All positions and ultimate outcomes remain under your direct ownership and control at Schwab.

What permissions does Toll Booth request through the Schwab API? Can it move cash?

For retail accounts, the Schwab API used by Toll Booth does not support granular, per-permission scopes. The API capabilities are:

• Read Positions
• Read Transactions
• Place Orders

The retail API does not provide endpoints for money movement or transfers. Toll Booth cannot move cash; it can only read positions/transactions and place orders when authorized. This design intentionally limits risk and scope.

How are Schwab access tokens and other sensitive data stored and protected?

Schwab OAuth refresh and access tokens, as well as other secrets, are:

• Encrypted in transit
• Encrypted at rest

Industry-standard security practices are followed to protect credentials and sensitive data.

What safeguards exist if Toll Booth or the Schwab API malfunctions and starts placing incorrect or duplicate orders?

Toll Booth uses multiple layers of validation both before and after orders are sent:

• Pre-trade checks validate that each order matches the intended strategy and account context.
• Post-trade checks regularly review active orders to confirm that the order instructions at Schwab still match what Toll Booth originally submitted.

For example, if Toll Booth submits a rolling order to buy to close an existing covered call and sell to open a new one, but you manually open a long call at the same strike and expiration, Schwab may automatically change the order legs (e.g., both legs set to buy to close). In this scenario, Toll Booth will attempt to:

• Detect the mismatch between the intended instructions and current order state.
• Cancel the affected rolling order.
• Submit a new rolling order to an option chain that does not conflict with an existing long position.

Additional details on order checks and safeguards are described here:

Covered call opening checks: https://tbt.ai/covered-call-opening

How much control do I have over strategy parameters for each ticker?

For each underlying, Toll Booth provides several layers of configurability and guardrails.

Percentage of shares covered
You can fine-tune which symbols are eligible for opening covered calls by using a “Do Not Open” list. Any symbol on this list will be excluded from new opening orders, allowing you to limit coverage on specific positions.

Target days-to-expiration (DTE) range
Toll Booth uses a research-driven default DTE range for covered calls. These baseline values and selection logic are documented here:
https://tbt.ai/covered-call-selection

Advanced customization can be considered as needs evolve.

Target delta / moneyness
Each account includes a “Preserve equities” setting. When enabled, Toll Booth adjusts:

• Target delta / moneyness
• Other selection factors designed to reduce assignment risk and better preserve the underlying equity exposure

The long-term roadmap includes evolving this from a simple checkbox into a more granular control (e.g., a slider between “maximize premium/returns” and “minimize assignment risk”).

Profit-taking thresholds
Toll Booth uses default profit-taking logic designed around the broader automation and order types in use. Details are available here:

• Profit-taking/closing rules: https://tbt.ai/covered-call-closing
• Example with NVDA stop-limit covered call: https://tbt.ai/blog/stop-limit-covered-call-nvda

Manually overriding thresholds may not always be compatible with certain order types (such as stop-limit orders). An example of where this can become problematic is described above.

Roll rules (e.g., when to roll near expiration or near-the-money)
Rolling rules are defined by a combination of base criteria and optional advanced behavior:

• Base rolling logic: https://tbt.ai/covered-call-rolling
• Advanced rolling scenario (e.g., scalp/diagonal-style behavior): https://tbt.ai/blog/rolling-scalp-diagonal-covered-call-mdgl

These rules govern when Toll Booth considers rolling due to time-to-expiration, moneyness, risk, and return trade-offs.

Do you automatically enforce liquidity and risk guardrails?

Yes, Toll Booth includes several guardrails, with a specific philosophy on what truly reflects liquidity and risk.

Minimum option volume / open interest
Toll Booth does not enforce hard minimums on chain volume or open interest. In practice, volume/open interest can be a poor standalone indicator of true liquidity for many underlyings.

Maximum bid/ask spread
Yes. Toll Booth enforces spread-based guardrails and will avoid trades where spreads exceed acceptable thresholds. The details of these constraints are documented here:
https://tbt.ai/covered-call-selection

Maximum contracts per ticker or per account
Toll Booth assumes:

• Reg-T margin
• Covered options trading approval

Under this framework, position sizing defaults to 1 covered call per 100 shares of the underlying. This enforces a simple and conservative interpretation of “covered.”

What kind of reporting and transparency do I get?

Toll Booth provides daily email summaries sent after market close. These reports typically include, per account and per ticker:

• Realized and unrealized P&L
• Premium collected and annualized metrics where applicable
• Assignment events
• Open positions and recent trade activity
• Other relevant performance and risk indicators

The reports are intentionally detailed to support data-oriented investors.

Do you have aggregate, anonymized live performance data for Toll Booth clients?

Yes, Toll Booth publishes certain anonymized, aggregate metrics:

• Average annualized premium yield by symbol:
  https://tbt.ai/covered-call-symbols
• Assignment frequency:
  To date, accounts that have enabled the “Preserve equities” setting have had zero short calls assigned.
• Comparison vs. buy-and-hold or covered-call ETFs:
  This content is being actively developed for the website. In general, Toll Booth’s approach—selling weekly calls with opportunistic, rules-based management—tends to outperform covered-call ETFs that sell monthly calls and use little or no position management beyond fixed schedules.

More formal benchmarking content will be published as it is finalized.

What are your support hours and typical response times for trading-related issues?

At this time, Toll Booth does not publish formal support hours or response-time SLAs. The platform is designed first and foremost for investors who like the idea of covered calls but do not want to manage the details themselves on a daily basis.

As the client base and use cases evolve—particularly with RIAs and professional managers—support and escalation structures may be formalized further.

How can I quickly pause or stop Toll Booth from placing orders, especially during fast markets?

You always retain full control via Schwab, and Toll Booth provides multiple ways to stop automated trading:

Turn off order placement in Toll Booth

• Log in to your Toll Booth account.
• Disable the relevant automation/“place orders” settings for the account.
• Once unchecked, Toll Booth will stop submitting new orders.

Change your Schwab password

Changing your Schwab login password automatically invalidates all existing OAuth tokens associated with your account. This immediately prevents Toll Booth (and any other connected applications using those tokens) from accessing the API or placing orders.

These mechanisms allow you to pause or stop automation instantly without needing to wait for a support response.