Covered Call Picks (DMND,IMAX,OVTI,CTRP,MHS)
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.
|DMND||Diamond Foods Inc||24.5||25||1.7||6.90%||Mar-12|
|OVTI||Omnivision Technologies Inc||16.8||17||1||6.00%||Mar-12|
|CTRP||Ctrip.com International Ltd||24.7||25||1.5||5.90%||Mar-12|
|MHS||Medco Health Solutions Inc||64||65||3.8||5.90%||Mar-12|
Diamond Foods Inc (DMND) is currently trading at $24.5. Its 52 week range is between $21.41 and $96.13.
IMAX Corp (IMAX) is currently trading at $23.75. Its 52 week range is between $12.57 and $38.
Omnivision Technologies Inc (OVTI) is currently trading at $16.75. Its 52 week range is between $10.15 and $37.05.
Ctrip.com International Ltd (CTRP) is currently trading at $24.69. Its 52 week range is $22.02 and $50.57.
Medco Health Solutions Inc (MHS) is currently trading at $64.01. Its 52 week range is between $44.6 and $66.38.
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
- Name That Chart | iBankCoin.com
- Great Covered Call Tools at BornToSell | FundMyMutualFund
- Wall Street To The Rescue?? | ZeroHedge
- US Won't Recognize Crimea Referendum Results (And 3 Awkward Questions For West's Liberals) | ZeroHedge
- My Secret to Success | iBankCoin.com
- Global Debt Crosses $100 Trillion, Rises By $30 Trillion Since 2007; $27 Trillion Is "Foreign-Held" | ZeroHedge
- STTG Market Recap March 6, 2014 | FundMyMutualFund
The most relevant financial news and articles from the Internets
- Lego Is for Girls | BusinessWeek
- 23 Photos That Show Why New Jersey’s Beautiful Revel Casino Is Struggling | Business Insider
- Streetinsider.com's Hot... | StreetInsider.com
- Why Johann Sebastian Bach Is The Voice Of God | Business Insider
- BEACONS: What They Are, How They Work, And Why Apple's iBeacon Technology... | Business Insider
- I ♥ New York Logo Designer Made A Gorgeous Psychedelic 'Mad Men' Season 7 Poster | Business Insider
- How Lego Become The World's Hottest Toy Company | Business Insider