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
- Martin Shkreli Sets Out To Crush KaloBios Shorts: Will Stop Lending Out Shares | ZeroHedge
- Out Of Gas: Gazprom Cuts Off Ukraine, Will Turkey Be Next? | ZeroHedge
- Unexpected Surge In Auction Demand For 7 Year Treasury | ZeroHedge
- Frontrunning: November 27 | ZeroHedge
- Overheard At The Trumpsgiving Day Parade | ZeroHedge
- Jeez! What Ever Happened To The "Free World"? | ZeroHedge
- To Junk Bond Traders "It Almost Feels Like 2008" | ZeroHedge
The most relevant financial news and articles from the Internets
- Here's what happens in your body when you get 'hangry' | Business Insider
- Actor Paul Walker's father sues Porsche over fatal... | Business Insider
- Russia vows to follows all WADA recommendations on doping... | Business Insider
- Tunisia identifies suicide bomber as local street vendor | Business Insider
- Pregnant women are dancing on Instagram and we've never seen anything like it... | Business Insider
- We tried the 'crazy wrap thing' people are using to get in shape superfast... | Business Insider
- Adele announces first tour in five years for new album... | Business Insider