Covered Call Picks (FSLR,SQNM,NFLX,GRPN,AMLN)
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.
|FSLR||First Solar Inc||22||23||1.9||8.50%||May-12|
|AMLN||Amylin Pharmaceuticals Inc||24.3||25||1.6||6.50%||May-12|
First Solar Inc (FSLR) is currently trading at $22. Its 52 week range is between $20.02 and $147.2.
Sequenom Inc (SQNM) is currently trading at $3.93. Its 52 week range is between $3.52 and $8.71.
Netflix Inc (NFLX) is currently trading at $104.26. Its 52 week range is between $62.37 and $304.79.
Groupon Inc (GRPN) is currently trading at $13.56. Its 52 week range is $12.95 and $31.14.
Amylin Pharmaceuticals Inc (AMLN) is currently trading at $24.28. Its 52 week range is between $8.03 and $25.84.
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
- Onward Toward Bullion Bank Collapse | ZeroHedge
- Jordanian Intelligence Has Been Stealing US Arms Intended For Syrian Rebels | ZeroHedge
- Something Just Snapped In VIX | ZeroHedge
- China: Has Policy Reflation Lost Momentum? | Financial Sense
- GoLDMaN STRoNG... | ZeroHedge
- Odey Makes 21% In Past 2 Days, Nearly Wiping Out Abysmal Start To The Year | ZeroHedge
- European Dead-Cat-Bounce Dies - Big Banks End Lower | ZeroHedge
The most relevant financial news and articles from the Internets
- This Twinkie is 40 years old | Business Insider
- Another 165 pages of Hillary Clinton emails have been... | Business Insider
- OPEC countries are feeling the heat from plummeting oil... | Business Insider
- People are losing it over the speech Donald Trump gave in front of a wall of garbage | Business Insider
- The 25 best countries for dating, according to millennials | Business Insider
- The US economy was even stronger than we thought in the first quarter | Business Insider
- The pound is giving up its gains | Business Insider