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
- Meet The LMCI - The Fed’s New Goal-Seeked, 19-Factor Labor Market Regression Rigmarole | ZeroHedge
- What Is the Bond Market Telling Us? | Financial Sense
- Maximum Boom-Boom | iBankCoin.com
- JUST ONE MORE BITE | iBankCoin.com
- Dropping Oil Prices Threaten Moscow’s Budget | Financial Sense
- Investor Net Worth Drops To New All Time Low, NYSE Reveals | ZeroHedge
- When Fighting The Fed Pays - Biotechs Hit Record Highs | ZeroHedge
The most relevant financial news and articles from the Internets
- Obama: 'Justice Will Be Done' After James Foley... | Business Insider
- There's Finally A Way To See Exactly What Your Dog's Doing Throughout... | Business Insider
- ESPN 'Regrets' Report About Michael Sam's Showering Habits At Rams Camp... | Business Insider
- Government Bond Yields Around The World Are Making New Lows Day In And Day Out | Business Insider
- A Former Federal Cybersecurity Director... | Business Insider
- There's Now A Fierce Bidding War For A Brazilian Internet... | Business Insider
- RICHMOND MANUFACTURING DATA HITS 3-YEAR HIGH | Business Insider