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
- How to Link Australian Iron With Marine le Pen | Financial Sense
- MAY YOU BURN IN THE FIRES OF 1,000 SUNS | iBankCoin.com
- Tech Bellwether IBM Sees Big Earnings Miss | Financial Sense
- New Home Sales Miss, August Drastically Revised Lower | ZeroHedge
- The End Of QE3, Trouble Ahead For The Bulls? | ZeroHedge
- Putin Warns Of Risk Of Major Conflict, Says Dollar Losing Reserve Currency Status | ZeroHedge
- Meet Janet Dupree:72, Alcoholic, HIV-Positive, $16,000 In Student Debt: "I Won't Live Long Enough To Pay It Off" | ZeroHedge
The most relevant financial news and articles from the Internets
- 33 Silicon Valley Investors Just Signaled A Big Doubt... | Business Insider
- Canada shooter planned to go to Syria: police | Business Insider
- Here's The Average SAT Score For Every College Major | Business Insider
- CHART OF THE DAY: Cell Phone Bills Are Up 50... | Business Insider
- Malcolm Gladwell Reveals The Personality Trait That's Made Him So Successful... | Business Insider
- The Single Most Important Risk To Stock Market Investors | Business Insider
- Amazing Video Shows 1.5 Million Wildebeest Journeying Across The Serengeti | Business Insider