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
- Is a Global Debt Deleveraging At Our Doorstep? | ZeroHedge
- Stocks Erase Draghi "Moar QE" Gains As USDJPY Tumbles | ZeroHedge
- Chinese Firms Edging Out Samsung and Apple in the Smartphone Industry | Financial Sense
- ECB Keeps Rates Unchanged, Focus Turns To Draghi Press Conference | ZeroHedge
- US Economic Momentum Remains Positive | Financial Sense
- Jobs Report Shouldn't Derail Fed Action | Financial Sense
- Is This Why Copper Is Collapsing? | ZeroHedge
The most relevant financial news and articles from the Internets
- 13 million children denied education by Mideast wars: UN | Business Insider
- 230,000 migrants arrive in Greece this year: official | Business Insider
- Israel unveils 1,800-year-old sarcophagus | Business Insider
- Work to do for Michigan at quarterback, Utah feeling... | Business Insider
- Hallucinogens Legally Sold as 'Bath Salts' a New Threat | BusinessWeek
- Donald Trump is absolutely destroying his Republican rivals in almost every facet | Business Insider
- Former Austin police officer charged in girlfriend's... | Business Insider