Bio-Tech Covered Calls (CLSN,PPHM,KERX,ISIS,SRPT)
What's a Covered Call?
The covered call is a strategy where an investor writes a call option contract (sells an option) while at the same time owning an equivalent number of shares of the underlying stock.If this stock is purchased simultaneously with writing the call contract, the strategy is commonly referred to as a buy-write.
While you may have heard that trading options is risky business, covered calls are actually a very conservative strategy, and most brokerages even allow retirement IRA accounts to write covered calls.
|PPHM||Peregrine Pharmaceuticals Inc||2.33||2.5||0.4||17.20%||February 2013|
|KERX||Keryx Biopharmaceuticals Inc||2.97||3||0.5||15.20%||February 2013|
|ISIS||Isis Pharmaceuticals Inc||11.9||12||1.1||9.20%||February 2013|
|SRPT||Sarepta Therapeutics Inc||28.3||29||2.6||9.00%||February 2013|
|AMRN||Amarin Corporation PLC||8.38||9||0.5||6.30%||February 2013|
Peregrine Pharmaceuticals Inc (PPHM) is currently trading at $2.33. Its 52 week range is between $0.39 and $5.5.
Keryx Biopharmaceuticals Inc (KERX) is currently trading at $2.97. Its 52 week range is between $1.28 and $5.19.
Isis Pharmaceuticals Inc (ISIS) is currently trading at $11.92. Its 52 week range is between $7.02 and $15.61.
Sarepta Therapeutics Inc (SRPT) is currently trading at $28.28. Its 52 week range is between $2.6 and $45.
Amarin Corporation PLC (AMRN) is currently trading at $8.38. Its 52 week range is between $6.52 and $15.96.
MASTERY Bottom line:
There are pros and cons to writing covered calls. In theory, this strategy will out perform outright stock ownership if the stock price declines, remains the same, or slightly increases in price. The principal disadvantage of this strategy, on the other hand, is that profit potential can be limited if the underlying stock price advances sharply.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- Weekend Top 100 | iBankCoin.com
- Keynes Was a Failure in Japan – No Need to Embrace Him in Europe | Financial Sense
- Beware International Financialization and Global Dirigisme | ZeroHedge
- Bubble Forming With Leveraged Buyouts | Financial Sense
- Military Plant In East Ukraine Devastated By Massive Explosion; Kiev Accuses Russia Of Using Tactial Nuke | ZeroHedge
- Technical Outlook for the Dollar | ZeroHedge
- Why the Debate Over U.S. LNG Exports Has Been Won | Financial Sense
The most relevant financial news and articles from the Internets
- Unusual 11 Mid-... | StreetInsider.com
- PODCAST: Which iPhone 6 Is Best? (AAPL, MSFT, YHOO, BABA) | Business Insider
- A Few Tips You Should Know Before You Get Started With The Bigger Screen On The iPhone 6 (AAPL... | Business Insider
- Sierra Leone faces criticism over Ebola shutdown | Business Insider
- Enrique hails 'unique' Messi, Neymar as Barca win... | Business Insider
- Laptop Computer Reviews - BusinessWeek | BusinessWeek
- SAP's Bid for Concur Is Better Than What CEO McDermott Said It Is | TheStreet.com