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
- Why Japan May Matter More Than Tapering | Financial Sense
- Trading The Technical With BofA: S&P500, EURUSD, Treasurys And Crude | ZeroHedge
- Despair, Hope, Growth, Optimism | ZeroHedge
- Will the Shale Gas Revolution Make North America’s LNG Ambitions Obsolete? | Financial Sense
- Uruguay Legalizes Pot Trade, But Who "Uses" The Most? | ZeroHedge
- Daily Market Recap | Financial Sense
- Guest Post: Why Our Consumer-Debt Dependent Economy Is Doomed | ZeroHedge
The most relevant financial news and articles from the Internets
- CHART OF THE DAY: Brands Are Picking Instagram For... | Business Insider
- Here Are Two More Stats To Show That Doom Is... | Business Insider
- The NSA Is Using Google's Advertising Cookies To Track Its Targets | Business Insider
- BILLION-DOLLAR EXITS: 12 Tech Companies That Struck It Rich In 2013 | Business Insider
- ... | StreetInsider.com
- Review: Yelp Will Get Your Feet Back on the Ground | TheStreet.com
- These Brands Cracked The 10 Most Popular YouTube Videos Of 2013 [THE BRIEF] | Business Insider