Covered Call Picks (MCP,NFLX,FB,LCC,BBY)
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.
Molycorp Inc (MCP) is currently trading at $8.78. Its 52 week range is between $5.75 and $35.79.
Netflix Inc (NFLX) is currently trading at $103.44. Its 52 week range is between $52.81 and $133.43.
Facebook Inc (FB) is currently trading at $30.95. Its 52 week range is between $17.55 and $45.
US Airways Group Inc (LCC) is currently trading at $14.67. Its 52 week range is between $5.81 and $15.5.
Best BUY Co Inc (BBY) is currently trading at $14.48. Its 52 week range is between $11.2 and $27.95.
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
- Switzerland's Gotthard Base Tunnel: Swiss Engineered, Foreign Made | ZeroHedge
- Ex-CEO Of Largest Swiss Insurer Commits Suicide, Three Years After CFO Hanged Himself | ZeroHedge
- Why The Next Black Swan Will Turn Into A Flock | ZeroHedge
- "This Is Not The America My Parents Immigrated To In 1957" | ZeroHedge
- Homeland Insecurity | ZeroHedge
- The Global Bear Market In Freedom | ZeroHedge
- Why the Brexit Vote Matters to US Investors | Financial Sense
The most relevant financial news and articles from the Internets
- Hallucinogens Legally Sold as 'Bath Salts' a New Threat | BusinessWeek
- Here's why Russians don't smile | Business Insider
- U.S. Kids Using Media Almost 8 Hours a Day - BusinessWeek | BusinessWeek
- 'Game of Thrones' just stunned fans with the reveal of a missing characters... | Business Insider
- Consumers' mindsets are shifting dramatically — and it's killing brands... | Business Insider
- I've eaten on $2 a day and tried living on an $8.15-an-hour salary in... | Business Insider
- BATS CEO: Too many companies are harming the stock market by refusing to do one thing... | Business Insider