Covered Call Picks (NUGT,WLT,SPWR,TIVO,GRPN)
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.
|NUGT||Direxion Daily Gold Miners Bull 3X Shrs||11.9||12||1.9||15.50%||June 2013|
|WLT||Walter Energy Inc||17.4||17.5||1.8||10.10%||June 2013|
|SPWR||SunPower Corp||14.9||15||1.5||9.80%||June 2013|
|TIVO||TiVo Inc||11.9||12||1.1||9.60%||June 2013|
|GRPN||Groupon Inc||5.84||6||0.5||9.20%||June 2013|
Direxion Daily Gold Miners Bull 3X Shrs (NUGT) is currently trading at $11.94. Its 52 week range is between $9.61 and $97.05.
Walter Energy Inc (WLT) is currently trading at $17.35. Its 52 week range is between $16.08 and $67.
SunPower Corp (SPWR) is currently trading at $14.87. Its 52 week range is between $3.71 and $15.65.
TiVo Inc (TIVO) is currently trading at $11.85. Its 52 week range is between $7.75 and $13.49.
Groupon Inc (GRPN) is currently trading at $5.84. Its 52 week range is between $2.6 and $14.93.
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
- Here's What Happens When A Currency Completely Breaks Down | ZeroHedge
- Why Italy’s Referendum Carries Risks for the Entire EU | Financial Sense
- David Rosenberg Throws Up On The "Trump Rally" - Here's Why | ZeroHedge
- White Anger: Fed Helped Elect Trump; Tale of Two Job Markets | Financial Sense
- Manufacturing Normality - Exposing The "Self-Appointed Guardians Of Reality" | ZeroHedge
- Dollar Comes Back Bid, but Still Vulnerable to Corrective Pressures | Financial Sense
- German Companies Pull Ads From Breitbart | ZeroHedge
The most relevant financial news and articles from the Internets
- Vietnam is making a big move into the... | Business Insider
- Fast-food CEO who says machines are the answer to rising wages is expected to... | Business Insider
- Some lawmakers think they can keep Social Security on life support for 75 more years... | Business Insider
- Paris just made all public transportation free to decrease some of the worst air pollution it's... | Business Insider
- 11 warm places you can travel to this winter without worrying about Zika | Business Insider
- How to use Musical.ly, the app with 150 million users that teens are obsessed with | Business Insider
- The 25 best tech companies to work for in 2016, according to employees | Business Insider