Covered Call Picks (JCP,GRPN,DDD,BBRY,SD)
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.
|JCP||J C Penney Company Inc||21.6||22||1.7||7.90%||March 2013|
|GRPN||Groupon Inc||5.8||6||0.5||7.90%||March 2013|
|DDD||3D Systems Corp||54.9||55||4.3||7.80%||March 2013|
|BBRY||Research In Motion Ltd||13.9||14||1.1||7.60%||March 2013|
|SD||SandRidge Energy Inc||5.88||6||0.4||6.10%||March 2013|
J C Penney Company Inc (JCP) is currently trading at $21.55. Its 52 week range is between $15.69 and $42.05.
Groupon Inc (GRPN) is currently trading at $5.8. Its 52 week range is between $2.6 and $20.5.
3D Systems Corp (DDD) is currently trading at $54.89. Its 52 week range is between $20.5 and $71.98.
Research In Motion Ltd (BBRY) is currently trading at $13.88. Its 52 week range is between $6.22 and $18.32.
SandRidge Energy Inc (SD) is currently trading at $5.88. Its 52 week range is between $4.81 and $8.98.
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
- A Little Something for Your Intraday Dice Game | iBankCoin.com
- Agri-Commodity Prices: A New High! | Financial Sense
- Famished for Moar Gains | iBankCoin.com
- Guest Post: How Monetary Policy Drives Foreign Policy | ZeroHedge
- Overnight Carry-Driven Futures Ramp Pushes Stocks Just Shy Of New Record | ZeroHedge
- Watch As Former Chris Christie Aide Bridget Anne Kelly Pleads The Fifth In Bridgegate | ZeroHedge
- "Magic" Collateral: A Frank Look At The Sheer Credit Horror About To Be Unleashed In China | ZeroHedge
The most relevant financial news and articles from the Internets
- Finally, A Beautiful Ad For Animal Adoption That Won't Leave You In Tears | Business Insider
- Virginia Town is Best Place in the U.S. to Raise Kids | BusinessWeek
- My High School No Longer Holds Dances Because Students... | Business Insider
- The 5 Best States For Women's Pay | Business Insider
- 2012 Honda CR-V | BusinessWeek
- 5 Insane Taco Bell-Themed Products That Actually Exist | Business Insider
- Cornell President David Skorton Leaving University To Head Smithsonian... | Business Insider