Covered Call Picks (NTAP,CLF,CSCO,NVDA,CMCSA)
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.
|NTAP||NetApp Inc||35.4||35.5||1.6||4.50%||February 2013|
|CLF||Cliffs Natural Resources Inc||36.6||37||1||2.60%||February 2013|
|CSCO||Cisco Systems Inc||21||21||0.5||2.50%||February 2013|
|NVDA||Nvidia Corp||12.4||12.5||0.3||2.50%||February 2013|
|CMCSA||Comcast Corp||39||39||0.7||1.80%||February 2013|
NetApp Inc (NTAP) is currently trading at $35.41. Its 52 week range is between $26.26 and $46.8.
Cliffs Natural Resources Inc (CLF) is currently trading at $36.61. Its 52 week range is between $28.05 and $74.43.
Cisco Systems Inc (CSCO) is currently trading at $20.97. Its 52 week range is between $14.96 and $21.34.
Nvidia Corp (NVDA) is currently trading at $12.43. Its 52 week range is between $11.15 and $16.9.
Comcast Corp (CMCSA) is currently trading at $38.97. Its 52 week range is between $26.93 and $40.28.
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
- Here Are The Most Shorted S&P And Russell Stocks (Yes, Trulia Is One Of Them) | ZeroHedge
- Ukraine Army Takes Bloomberg Reporter Hostage: Fascinating Report Ensues | ZeroHedge
- How To Go Out At The Top | Altucher Confidential
- US Services PMI Beats After Last Week's Manufacturing PMI Record Miss, Employment Plunges | ZeroHedge
- An Abandoned Chart | iBankCoin.com
- Is This How China Will Deal With Its Massive Mal-Investment? | ZeroHedge
- All About That Small Cap Life | iBankCoin.com
The most relevant financial news and articles from the Internets
- Time-Lapse Video Shows Israel Flattening A Gaza... | Business Insider
- Here's What Apple's Murder of Microsoft Might Look Like | TheStreet.com
- Researchers Think They've Discovered A Happiness Gene | Business Insider
- 9 Easy Tips For Finding Exactly What You Want On Google | Business Insider
- China Troubles Bite McDonald's: Chart of the Day | TheStreet.com
- Russia's Smartest People Are Leaving In Droves | Business Insider
- GARY SHILLING: Q2 GDP Growth Was Closer To 1%, Not The 3% Everyone's... | Business Insider