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
- Chile con Bottom Recipe | iBankCoin.com
- IRA Contributions Hit Record High As Unpatriotic Americans "Save More, Pay Off Debt, Spend Less" | ZeroHedge
- The First Victims of the End of QE – Small Cap Stocks and Junk Bonds | Financial Sense
- Will Investors Get Out In Time This Time? | Financial Sense
- Summertime Blues for Commodities | iBankCoin.com
- "The West's Public Enemy Number One" | ZeroHedge
- Housing Starts Plunge Due to Horrific Data From the South | Financial Sense
The most relevant financial news and articles from the Internets
- The Inventory Of Low-End American Homes Continues To Be Tight | Business Insider
- The Guy Who Asked People To Invest In His Mystery Product Finally... | Business Insider
- Amazon's New Earbuds Won't Get Tangled And They're A Lot Better... | Business Insider
- 10 Things In Tech You Need To Know This Morning (FB, YHOO, AAPL... | Business Insider
- 10 Things You Need To Know Before The Opening Bell (DIA, SPY, SPX, QQQ, FB, F) | Business Insider
- How Millennials Missed Out On A Gigantic Fortune In The stock Market | Business Insider
- Former Employees Sue Apple For Unpaid Wages | Business Insider