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
- Suppressors - The First Battle In The New Push For Gun Rights | ZeroHedge
- Peak Savings: Wall Street Faces 20 Years Of Retirement Withdrawals As Boomers Hit 70 1/2 | ZeroHedge
- Rally in Oil Continues on Global Cues, Saudi Cut | Financial Sense
- China Warns Trump "It Will Take Off The Gloves" If He Continues To Provoke Beijing | ZeroHedge
- US Equities... Last. Man. Standing. | ZeroHedge
- The Psychological Impact Of Loss | ZeroHedge
- New ABC / WaPo Poll Shows Drop In Trump Favorability Courtesy Of Aggressive "Oversamples" | ZeroHedge
The most relevant financial news and articles from the Internets
- 25 Ways to Make LinkedIn Work for You | BusinessWeek
- Excel is the go-to tool for finance... | Business Insider
- 5 ways to spot a fake diamond | Business Insider
- 11 interview questions from bosses like Elon Musk and Larry Ellison that... | Business Insider
- Pulse nightclub shooter's... | Business Insider
- 10 cities where college graduates owe more than they earn | Business Insider
- 34 giant Chinese infrastructure projects that are reshaping the... | Business Insider