Covered Call Picks (FRO,GMCR,ITMN,DRYS,SINA)
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.
|GMCR||Green Mountain Coffee Roasters Inc||52.5||52.5||5.1||9.70%||May-12|
Frontline Ltd (FRO) is currently trading at $6.81. Its 52 week range is between $2.52 and $25.09.
Green Mountain Coffee Roasters Inc (GMCR) is currently trading at $52.45. Its 52 week range is between $34.06 and $115.98.
InterMune Inc (ITMN) is currently trading at $14.7. Its 52 week range is between $10.67 and $51.71.
DryShips Inc (DRYS) is currently trading at $3.44. Its 52 week range is $1.75 and $5.12.
SINA Corp (SINA) is currently trading at $65.78. Its 52 week range is between $46.86 and $147.12.
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
- "Q4 GDP Below 2%, December Payrolls Under 200,000" Markit Warns As Service PMI Crashes To 10-Month Low | ZeroHedge
- Closing a Chapter, Opening an Old One Again | iBankCoin.com
- The Fed Is "Confused & Confusing" | ZeroHedge
- Does Russia Present a Systemic Threat to Global Markets? | Financial Sense
- The End Of Exuberance? | ZeroHedge
- Just What Is China Buying? | ZeroHedge
- RERAX, I AM A DOCTOR | iBankCoin.com
The most relevant financial news and articles from the Internets
- Sony hack a 'serious national security matter':... | Business Insider
- 3 Websites That Will Transform Every Man Into A Modern Gentleman | Business Insider
- Here's How Much Oil The World's Biggest Oil Players Are Sitting On | Business Insider
- 11 Mind-Blowing Facts About North Korea | Business Insider
- Sony Could Lose $100 Million By Pulling 'The Interview' | Business Insider
- Putin promises economic recovery, digs in on Ukraine | Business Insider
- ... | StreetInsider.com