<p>In Websphere when you do an LDAP query using LdapContext are the transmission of credentials encrypted?</p>

<pre><code>LdapContext ctx = new InitialLdapContext (env, null);
</code></pre>

<p>Lets say I make an LdapContext for a web app to do some custom LDAP calls.</p>

<p>How do I know if my call is secure / encrypted?</p>

In order to secure/encrypt your LDAP calls you need to issue the "Start TLS" operation.
Otherwise I think transport is plain text.
For more:
http://java.sun.com/products/jndi/tutorial/ldap/ext/starttls.html
Obviously the Java API is based on LDAP itself.  So you could learn more about how the protocol itself handles it...i.e.:
http://en.wikipedia.org/wiki/Ldap#StartTLS