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
- NYC Mayor De Blasio Ebola Update "Under Control - No Cause For Alarm" - Live Webcast | ZeroHedge
- NYC Doctor Confirmed Positive For Ebola; Contact With Girlfriend (Quarantine) & 3 Others; "Unlikely" Contagious On Subway | ZeroHedge
- Why Advertising Revenue At CNBC Parent Comcast Declined By 5% | ZeroHedge
- MeeT ZeRo THe WHiTeHouSe GuaRD DoG... | ZeroHedge
- NYPD Stunner: Cops Exit Ebola Victim Apartment, Dump Gloves, Masks In Sidewalk Trash Can | ZeroHedge
- Back to the Future with These Two Iconic Brands | iBankCoin.com
- Big Four Economic Indicators Show Possible Rollover | Financial Sense
The most relevant financial news and articles from the Internets
- CSX's Michael Ward Explains How Railroads Drive the Global Economy | TheStreet.com
- Zellweger 'new face' highlights Hollywood aging taboo... | Business Insider
- Struggling Emerge Energy Is Ready to Soar on Oil Price Recovery | TheStreet.com
- Messi targets record as Suarez debuts in Spanish El... | Business Insider
- The PlayStation TV Might Not Be An Apple TV... | Business Insider
- BARCLAYS: These 25 Stocks Are Ready To Bounce Back From The... | Business Insider
- Notable... | StreetInsider.com