Covered Call Picks (CALL,WLT,VRTX,CRUS,BKS)
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.
magicJack Vocaltec Ltd (CALL) is currently trading at $14.99. Its 52 week range is between $9.5 and $28.22.
Walter Energy Inc (WLT) is currently trading at $47.28. Its 52 week range is between $44.91 and $132.38.
Vertex Pharmaceuticals Inc (VRTX) is currently trading at $56.77. Its 52 week range is between $26.5 and $66.1.
Cirrus Logic Inc (CRUS) is currently trading at $27.88. Its 52 week range is $12.52 and $29.5.
Barnes & Noble Inc (BKS) is currently trading at $15.42. Its 52 week range is between $9.35 and $26.
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 Does A Stock Market Operate In War? Syria - A Case Study | ZeroHedge
- The New Wave Of Violent Protests Is Exactly What The Elite Want - Here's Why | ZeroHedge
- A Storm Is Brewing Over Europe | Financial Sense
- Ruth Bader Ginsburg: "Not The Best Of Times" For America, "I Read WaPo And NYT Every Day" | ZeroHedge
- Mexico Prepares Plan To Ditch U.S. Grain Imports As NAFTA Showdown Looms | ZeroHedge
- Eight Reasons Why The Dutch Election Matters | ZeroHedge
- In The Police-State-Versus-Freedom Arms Race, Freedom Seems To Be Winning | ZeroHedge
The most relevant financial news and articles from the Internets
- Beijing cements South China Sea land grab with missile... | Business Insider
- Laptop Computer Reviews - BusinessWeek | BusinessWeek
- ... | Business Insider
- The White House had a curious explanation for Trump describing... | Business Insider
- 10 million self-driving cars will be on the road by... | Business Insider
- Kansas man charged with murder in bar shooting may have been racially... | Business Insider
- 4 tax credits 20-somethings shouldn't forget to... | Business Insider