Covered Call Picks (LNKD,WLT,LCC,NOK,VVUS)
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.
|WLT||Walter Energy Inc||51.4||52.5||2.4||4.70%||Jun-12|
|LCC||US Airways Group Inc||12.6||13||0.6||4.60%||Jun-12|
|NOK||Nokia ADR representing one Ord Shs Series A||2.95||3||0.1||4.40%||Jun-12|
LinkedIn Corp (LNKD) is currently trading at $99.94. Its 52 week range is between $55.98 and $120.63.
Walter Energy Inc (WLT) is currently trading at $51.4. Its 52 week range is between $47.42 and $132.38.
US Airways Group Inc (LCC) is currently trading at $12.62. Its 52 week range is between $3.96 and $12.4.
Nokia ADR representing one Ord Shs Series A (NOK) is currently trading at $2.95. Its 52 week range is $2.68 and $8.22.
Vivus Inc (VVUS) is currently trading at $24.89. Its 52 week range is between $6.13 and $26.75.
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
- U.S. Retail Offsets Eurozone Weakness | Financial Sense
- Gold Jumps Above $1200 on China Rate Cut; Draghi Vows “More Inflation” | Financial Sense
- S&P 500 "Most Overbought" Since Feb 2012 | ZeroHedge
- Kissinger Warns of “Fatal Mistakes” on Sanctions, Russia, Cold War | Financial Sense
- Global Economies Will Dictate Rate Hike Timing | Financial Sense
- Futures Soar On Surprise Chinese Rate Cut | ZeroHedge
- Dr. Gary Small on "The Alzheimer's Prevention Program" | Financial Sense
The most relevant financial news and articles from the Internets
- The No. 1 Prospect In The NFL Draft Is Relentlessly Nice, And It Drives Opponents Crazy | Business Insider
- The Derrick Rose Contract Has Become A Nightmare For The Chicago Bulls | Business Insider
- A Tech Company Once Valued At $1 Billion Is About To Sell For $15 Million... | Business Insider
- Amazon's Hit Man | BusinessWeek
- Biden, Erdogan seek to ease narrow differences on Syria | Business Insider
- Aereo May Be Dead, But Over-The-Top Television Is Just Beginning | TheStreet.com
- The ‘Freemium’ Model Is Brilliant, But It’s Ruining My Life | Business Insider