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
- Annaly CEO: Central Bankers Are Witch Doctors, Demands "Return To Market-Driven Pricing" | ZeroHedge
- Taking The Monetary Policy Ride Into The Theater Of The Absurd | ZeroHedge
- When Will the Fed Hike Rates? It All Comes Down to “Patience” | Financial Sense
- Venezuela's Maduro Claims US Pilot Arrested For Espionage, Bans Bush, Cheney From Entering Nation | ZeroHedge
- NYSE Margin Debt Declined in January | Financial Sense
- Breaking Bad (Debt) - Episode 2 | ZeroHedge
- Meet Linebarger - The Government's Biggest Private Debt Collector | ZeroHedge
The most relevant financial news and articles from the Internets
- Japanese firm behind Ebola drug says tests offer 'hope... | Business Insider
- Former NBA player Anthony Mason has died at age 48 | Business Insider
- Yasar Kemal, Turkey's literary giant, dies aged 92 | Business Insider
- International football board pushes back video... | Business Insider
- Kevin Garnett had a fantastic reaction to a dancing fan in... | Business Insider
- Why these karaoke company founders turned down 4 offers of $1.5 million on 'Shark... | Business Insider
- HP CEO Meg Whitman makes the whole company follow the advice in this book (HPQ) | Business Insider