Covered Call Picks (VVUS,DNDN,SHLD,FSLR,SINA)
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.
|SHLD||Sears Holdings Corp||54.9||55||4.8||8.70%||Mar-12|
|FSLR||First Solar Inc||39.7||40||3.4||8.60%||Mar-12|
Vivus Inc (VVUS) is currently trading at $11.18. Its 52 week range is between $6 and $13.18.
Dendreon Corp (DNDN) is currently trading at $14.49. Its 52 week range is between $6.46 and $43.96.
Sears Holdings Corp (SHLD) is currently trading at $54.86. Its 52 week range is between $28.89 and $94.79.
First Solar Inc (FSLR) is currently trading at $39.71. Its 52 week range is $29.87 and $175.45.
SINA Corp (SINA) is currently trading at $68.69. Its 52 week range is between $46.86 and $147.12.
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
- Everything Changed In 1980 - Why The Fed Is Wrong | ZeroHedge
- Crude Spikes Above $49 After Biggest Inventory Draw Since 2015 | ZeroHedge
- Market Recap May 23, 2016 | FundMyMutualFund
- Never Been Richer - Investors Are Paying Historically High Multiples For Sales | ZeroHedge
- The Wildest Predictions For Oil Prices In 2016 | ZeroHedge
- European Close Triggers Precious Metals Plunge | ZeroHedge
- Frontrunning: May 23 | ZeroHedge
The most relevant financial news and articles from the Internets
- People who can speak multiple languages are invaluable in the... | Business Insider
- Glide, the $100 million video-messaging startup, laid off 25% of its... | Business Insider
- Budweiser ad starring UFC star Conor McGregor banned because he is 'a hero... | Business Insider
- 4 important things you probably missed on this week's 'Game of Thrones... | Business Insider
- Mark Cuban's foray into politics has reached new heights | Business Insider
- Millennials are more likely to live at home than any other young adults in American... | Business Insider
- The director of the WHO just issued a chilling warning... | Business Insider