Covered Call Picks (ARNA,CHK,SINA,HLF,SLW)
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.
|ARNA||Arena Pharmaceuticals Inc||5.92||6||2.2||36.80%||Jan-13|
|CHK||Chesapeake Energy Corp||14.9||15||3.6||24.10%||Jan-13|
|SLW||Silver Wheaton Corp||25.6||26||3.9||15.20%||Jan-13|
Arena Pharmaceuticals Inc (ARNA) is currently trading at $5.92. Its 52 week range is between $1.23 and $7.02.
Chesapeake Energy Corp (CHK) is currently trading at $14.91. Its 52 week range is between $13.32 and $35.75.
SINA Corp (SINA) is currently trading at $54.74. Its 52 week range is between $46.86 and $128.17.
Herbalife Ltd (HLF) is currently trading at $45.96. Its 52 week range is $42.15 and $73.
Silver Wheaton Corp (SLW) is currently trading at $25.62. Its 52 week range is between $22.94 and $42.5.
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
- The Public Pension Time Bomb Is Starting to Explode | Financial Sense
- Driverless Vehicles Coming Faster than You Think | Financial Sense
- December Rate Hike Considerations | Financial Sense
- The Big Four Economic Indicators: Industrial Production Rises Slightly | Financial Sense
- Taliban Release Drone Film Of Suicide Attack In Afghanistan | ZeroHedge
- Oil’s Biggest Threat: Demand to Peak Within 15 Years | Financial Sense
- Tax Foundation Analyzes Tax Plans: 10-Year GDP (Trump +6.9%, Hillary -2.6%), Wage Growth (Trump +5.4%, Hillary -2.1%) | Financial Sense
The most relevant financial news and articles from the Internets
- This beautiful coffee table has raised over $1.7... | Business Insider
- Watch a US-led coalition airstrike obliterate a factory producing ISIS' most dangerous weapon | Business Insider
- Mike Trout is the best player in baseball — but hardly anyone cares | Business Insider
- 9 small things you do that people use to judge your personality | Business Insider
- 9 simple ways to start a conversation with strangers at awkward networking... | Business Insider
- 10 things people know about you before you even speak | Business Insider
- THE... | Business Insider