Covered Call Picks (GMCR,KERX,HLF,KORS,NFLX)
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 $48.94. Its 52 week range is between $17.11 and $71.15.
Keryx Biopharmaceuticals Inc (KERX) is currently trading at $6.73. Its 52 week range is between $1.28 and $9.98.
Herbalife Ltd (HLF) is currently trading at $35.79. Its 52 week range is between $24.24 and $73.
Michael Kors Holdings Ltd (KORS) is currently trading at $55.87. Its 52 week range is between $31.75 and $60.
Netflix Inc (NFLX) is currently trading at $184.41. Its 52 week range is between $52.81 and $177.89.
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
- The Militarization Of The US Goes Beyond Police Departments" | ZeroHedge
- This Is How Venezuelan Truckers Avoid Looters | ZeroHedge
- Imports Collapse At East Coast Ports | ZeroHedge
- Caught On Film - Juncker "Disappears" Farage | ZeroHedge
- 71% of Americans Think the Economy is “Rigged” … They’re RIGHT | ZeroHedge
- Trump Jumps To Four Point Lead Over Clinton In First Post-Brexit Poll | ZeroHedge
- US Shale Producers Just Won Their Biggest Legal Case in Years | Financial Sense
The most relevant financial news and articles from the Internets
- Traditional banks may be in trouble due to digital banking | Business Insider
- Salesforce CEO Marc Benioff says he won't... | Business Insider
- Turkish officials: Istanbul airport bombers... | Business Insider
- 11 frantic questions financial advisers get all the time | Business Insider
- 10 things you do that make you less likable | Business Insider
- The first-ever television commercial aired 75 years ago today | Business Insider
- Stealth startup Zoox lands $200 million for its secretive self-driving car... | Business Insider