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
- The REAL Reason Greece Matters For Investors | ZeroHedge
- Meanwhile, Back In Obama Legacy-Land | ZeroHedge
- Jade Helm, Terrorist Attacks, Surveillance & Other Fairy Tales For A Gullible Nation | ZeroHedge
- DueLiNG MaRKeT PeRiLS... | ZeroHedge
- Four Drivers in the Week Ahead | ZeroHedge
- Greferendum Caption Contest: Two For The Price Of One | ZeroHedge
- Greece Fallout: Italy & Spain Have Funded A Massive Backdoor Bailout Of French Banks | ZeroHedge
The most relevant financial news and articles from the Internets
- After the split, HP Enterprise will be forbidden from selling itself (HPQ) | Business Insider
- Emergency eurozone summit on Greece on Tuesday | Business Insider
- Sheryl Sandberg joins the board of SurveyMonkey, where her late... | Business Insider
- 'Shark Tank' investor Robert Herjavec explains the 4 most... | Business Insider
- Science says having a challenging job could protect you from cognitive decline | Business Insider
- Ten Things Only Bad Managers Say | BusinessWeek
- Unusual 11 Mid-Day... | StreetInsider.com