Covered Call Picks (VHC,AVP,TPX,END,SODA)
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.
|VHC||VirnetX Holding Corp||31||31||3||9.70%||Jun-12|
|AVP||Avon Products Inc||20.9||21||1.7||8.10%||Jun-12|
|TPX||Tempur-Pedic International Inc||49.9||50||3.4||6.80%||Jun-12|
|END||Endeavour International Corp||8.49||10||0.6||6.50%||Jun-12|
|SODA||Sodastream International Ltd||36.1||37.5||1.9||5.10%||Jun-12|
VirnetX Holding Corp (VHC) is currently trading at $30.99. Its 52 week range is between $11.01 and $41.77.
Avon Products Inc (AVP) is currently trading at $20.89. Its 52 week range is between $16.09 and $30.63.
Tempur-Pedic International Inc (TPX) is currently trading at $49.92. Its 52 week range is between $44.5 and $87.43.
Endeavour International Corp (END) is currently trading at $8.49. Its 52 week range is $5.8 and $16.43.
Sodastream International Ltd (SODA) is currently trading at $36.11. Its 52 week range is between $27.6 and $79.72.
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
- Ron Paul Slams Gen. Wesley Clark: Is He Kidding, Internment Camps? | ZeroHedge
- Trump Is "The Best Thing To Happen To Politics In A Long Time," Mark Cuban Says | ZeroHedge
- Does "Creative Destruction" Include The State? | ZeroHedge
- German Economic Council Backs Exit For "Uncooperative" Eurozone Members | ZeroHedge
- UK Government Admits 250,000 Porn Websites Visited On Parliament PCs | ZeroHedge
- Supply And Demand In The Gold And Silver Futures Markets | ZeroHedge
- Commodity Carnage Will Hurt These 10 States The Most | ZeroHedge
The most relevant financial news and articles from the Internets
- The Hungarian Grand Prix was a crazy F1 race that saw... | Business Insider
- Stocks are getting smoked (SPY, DJI, IXIC, GLD, GLX, USO, WTI, OIL, VDE) | Business Insider
- Pork prices are surging in China | Business Insider
- Gold may be having its 'magazine indicator' moment | Business Insider
- Laptop Computer Reviews - BusinessWeek | BusinessWeek
- ... | StreetInsider.com
- Ocean City, Md.: America's Most Affordable Fun City | BusinessWeek