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
- Lies, Lies, & OMG More Lies... | ZeroHedge
- "Get Out Traitor" - German Justice Minister Flees In Armored Mercedes After Angry Protesters Boo Him Offstage | ZeroHedge
- The Implications of Sino-US Trade Tensions | Financial Sense
- Warning: Hawkishness Ahead | Financial Sense
- State-Sanctioned Theft - The Failed War On Drugs And Cops' Abuse Of Civil Forfeiture | ZeroHedge
- Nothing Is Real: "It's All Being Played To Keep People Believing The System Is Working" | ZeroHedge
- Deutsche Bank Has Systemic Money Laundering, Terrorist Financing And Sanctions Problems: UK Regulator | ZeroHedge
The most relevant financial news and articles from the Internets
- After a 10-month delay, the US finally has an ambassador to one of... | Business Insider
- Russia and Saudi Arabia are battling over a big oil customer | Business Insider
- The Best Business Schools of 2011 | BusinessWeek
- The biggest change in fast food isn’t about food — and it should terrify chains... | Business Insider
- This regional soda could take over the United States thanks to its... | Business Insider
- Japanese engineers have built a super-efficient floating solar plant | Business Insider
- An Australian politician set a river on fire to show the effects of fracking on the environment... | Business Insider