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
- Venezuela Is Now The Most Expensive Country In The World | ZeroHedge
- Lawmaker Calls For Study On Links Between Pharmaceuticals And Mass Killers | ZeroHedge
- Stock-Buying-Frenzy Continues Amid Longest VIX "Losing" Streak Since 2011 | ZeroHedge
- The World Map Of Debt | ZeroHedge
- From Bezzle To Bummer - The Mirage Of "Psychic" Wealth | ZeroHedge
- HSBC Asks If "US Is Turning European, Or Is It Japanese" As It Cuts 10 Year Forecast From 2.8% to 1.5% | ZeroHedge
- President Hillary Clinton Will Oppose Crude Oil Exports | Financial Sense
The most relevant financial news and articles from the Internets
- Laptop Computer Reviews - BusinessWeek | BusinessWeek
- Actor Randy Quaid says he could be deported next week | Business Insider
- AP source: Rubio raises $6M over last 3 months | Business Insider
- At least 13 killed in Yemen wedding bombing: medic | Business Insider
- French labor tensions ease as garbage collector strike... | Business Insider
- LEADING OFF: 4 games on tap; Kershaw vs Mets; Midwest... | Business Insider
- Britain urges EU to speed migrant deportation | Business Insider