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
- 6 Reasons Why ECB Will Avoid QE As Long As Possible (And Why The Fed Did It) | ZeroHedge
- STTG Market Recap August 27, 2014 | FundMyMutualFund
- Deutsche Bank: Ignoring Food Price Pressures Could Be a Mistake | Financial Sense
- Small Cap Relative Strength | Financial Sense
- In Iraq, the United States and Iran Align Against the Islamic State | Financial Sense
- This Has Never Happened Before | ZeroHedge
- Pre-Holiday Week Short Squeeze ideas | iBankCoin.com
The most relevant financial news and articles from the Internets
- 4 Ways To Get Ahead At Work Without Sucking Up | Business Insider
- Top Silicon Valley Investor Bill Gurley Is All About These Startup Trends Right Now | Business Insider
- 4K TV Shipments Are Ramping Up Much Faster Than HD TV Did In The Past | Business Insider
- USC Football Player Quits Team, Calls Coach A Racist In Instagram Post | Business Insider
- Google Exec Megan Smith Might Be The Next CTO Of The United States | Business Insider
- New Poll Shows Mitt Romney Would Dominate In Iowa | Business Insider
- Samsung Wants Everyone To Know Its New Galaxy Phone Didn't Copy Apple | Business Insider