Covered Call Picks (GMCR,JCP,DDD,KORS,HLF)
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.
Green Mountain Coffee Roasters Inc (GMCR) is currently trading at $43.28. Its 52 week range is between $17.11 and $71.15.
J C Penney Company Inc (JCP) is currently trading at $21.01. Its 52 week range is between $15.69 and $43.18.
3D Systems Corp (DDD) is currently trading at $62. Its 52 week range is between $18.93 and $71.98.
Michael Kors Holdings Ltd (KORS) is currently trading at $57.47. Its 52 week range is between $29.32 and $60.
Herbalife Ltd (HLF) is currently trading at $38.67. Its 52 week range is between $24.24 and $73.
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
- "Change" Indeed | ZeroHedge
- LiVe LoNG AND PRoSPeR... | ZeroHedge
- NYC Residents Pay $2-3,000 A Month For “Micro-Apartments” As Luxury Car Sales Outpace Regular Car Sales | ZeroHedge
- As Greek Default Fears Return, Government Considers "Borrowing" Pensions To Repay IMF | ZeroHedge
- China’s Rate Cut Insufficient: Investors Expect More PBoC Stimulus and Yuan Devaluation | Financial Sense
- Can Greece "Just Print Drachmas"? Goldman Answers | ZeroHedge
- OPEC’s Influence Has Long Been Exaggerated | Financial Sense
The most relevant financial news and articles from the Internets
- Warren Buffett wishes he dumped Berkshire Hathaway back in 1964 | Business Insider
- Palantir, the War on Terror's Secret Weapon | BusinessWeek
- Hong Kong lawmakers hand themselves in to police over... | Business Insider
- 14 reasons the Qatar World Cup is going to be a disaster | Business Insider
- Who's running Microsoft these days? Satya Nadella's brain trust | Business Insider
- The most important features in Samsung's sleek new Galaxy S 6 smartphones... | Business Insider
- Greece's economy is tanking again and the new... | Business Insider