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
- Greek Government Tells Tax-Burdened Self-Employed: "Go To Bulgaria" | ZeroHedge
- US 'Relocated' ISIS Terrorists Out Of Iraq, Into Syria To Fight Assad | ZeroHedge
- Will Draghi Promise To Save The World Again? - ECB Press Conference Live Feed | ZeroHedge
- Tax Foundation Analyzes Tax Plans: 10-Year GDP (Trump +6.9%, Hillary -2.6%), Wage Growth (Trump +5.4%, Hillary -2.1%) | Financial Sense
- 'Russian Hacker' Arrested In Prague Last Week, Announcement "Tactically Delayed" Until Day Of US Debate | ZeroHedge
- Housing Starts Crash Most In 5 Years To 18-Month Lows | ZeroHedge
- The Federal Reserve Is Hillary Clinton's Secret Weapon | ZeroHedge
The most relevant financial news and articles from the Internets
- Digital video ads are most effective in the morning | Business Insider
- This Brooklyn coffee shop charges by the minute rather than by the cup | Business Insider
- 4 subscription boxes for guys who hate going to stores to shop for clothes | Business Insider
- AOL founder Steve Case says Silicon Valley's dominance is coming... | Business Insider
- Activist investing is more popular than ever | Business Insider
- A global intelligence analyst explains what... | Business Insider
- US district court: Ohio must allow illegally purged... | Business Insider