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
- UMich Consumer Confidence Fades From Early May Exuberance, Inflation Expectations Slump To Record Lows | ZeroHedge
- Disillusioned Democrats & The Demise Of Democracy In America | ZeroHedge
- The Looting Stage Of Capitalism Begins: Germany's Assault On The IMF | ZeroHedge
- Meanwhile In China, Cow-Collateralized Stock Buybacks | ZeroHedge
- The Solar Story Is Just Getting Started | Financial Sense
- WTI Crude Tops $50 For First Time Since October Amid Supply Disruptions | ZeroHedge
- Exposing Detroit's "No School Administrator Left Behind" Program | ZeroHedge
The most relevant financial news and articles from the Internets
- India’s weather is so hot its roads are melting | Business Insider
- The Native Ad Report: Revenue forecasts and top drivers | Business Insider
- This is about to be the best reason to switch from iPhone to Android (GOOG) | Business Insider
- These are all the Memorial Day sales you should know about | Business Insider
- This iPhone battery case is one of the strangest on the market, but also one of the... | Business Insider
- This exclusive report reveals the ABCs of the IoT | Business Insider
- Amber Heard is reportedly granted restraining order against Johnny Depp,... | Business Insider