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
- Tuesday Night Charts | iBankCoin.com
- Over 1000 US, NATO Troops Begin Military Exercises In Ukraine | ZeroHedge
- Washington's Bait-And-Switch: NATO Armed Kiev Under Cover Of Ceasefire | ZeroHedge
- Transportation Stocks Boosted by Lower Oil Prices | Financial Sense
- Subprime Is Back With A Vengeance | ZeroHedge
- Japanese Economy Contracts Bigger Than Expected 7.1% in 2nd Quarter | Financial Sense
- The Sweet Taste of Russia | iBankCoin.com
The most relevant financial news and articles from the Internets
- Notable... | StreetInsider.com
- Suze Orman, Debit-Card Dealer | BusinessWeek
- ISIS Has Put Rand Paul In A Very Difficult Position | Business Insider
- Emerging Payment Technologies Will Create New Winners And Losers In The Massive... | Business Insider
- 21 'Geniuses' Just Won $625,000 To Spend However They Want | Business Insider
- Two Decades After Escaping The Wars In Yugoslavia, This... | Business Insider
- The Next Three Days Are Going To Be Huge | Business Insider