Covered Call Picks (BBRY,MBI,CLF,AKAM,CHK)
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.
Research In Motion Ltd (BBRY) is currently trading at $14.99. Its 52 week range is between $6.22 and $18.32.
MBIA Inc (MBI) is currently trading at $11.97. Its 52 week range is between $6.78 and $13.7.
Cliffs Natural Resources Inc (CLF) is currently trading at $22.09. Its 52 week range is between $21.35 and $73.63.
Akamai Technologies Inc (AKAM) is currently trading at $34.69. Its 52 week range is between $25.9 and $42.53.
Chesapeake Energy Corp (CHK) is currently trading at $22.46. Its 52 week range is between $13.32 and $26.09.
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
- G-7, EU Banking Officials Hold Emergency Calls Ahead Of Black Monday | ZeroHedge
- The ECB Suddenly Has A Huge Headache On Its Hands | ZeroHedge
- Recession vs. Wealth Inequality | Financial Sense
- Why We're Headed Toward A "Cashless Society" | ZeroHedge
- Late Night Talkin’ Greasy | iBankCoin.com
- Dow Tumbles 200 Points - Gives Up 2015 Gains | ZeroHedge
- Market Recap Jun 29, 2015 | FundMyMutualFund
The most relevant financial news and articles from the Internets
- Vargas double as Chile sink Peru to reach Copa America... | Business Insider
- Japan factory production down 2.2% on-month in May | Business Insider
- Spicing up Malaysia's beloved 'fatty rice' | Business Insider
- Robert Redford sees 'last chance' to fix climate | Business Insider
- Nobody is using this awesome Instagram feature that finally gives you some... | Business Insider
- Programmatic ad pricing is starting to rise as demand outstrips supply | Business Insider
- This one personality trait can make or break your career | Business Insider