Covered Call Picks (FSLR,URI,MS,GRPN,SPPI)
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.
|FSLR||First Solar Inc||15||15||1.7||11.00%||Jul-12|
|URI||United Rentals Inc||32.3||33||2.6||8.00%||Jul-12|
|SPPI||Spectrum Pharmaceuticals Inc||11.7||12||0.8||6.40%||Jul-12|
First Solar Inc (FSLR) is currently trading at $14.95. Its 52 week range is between $11.43 and $142.22.
United Rentals Inc (URI) is currently trading at $32.3. Its 52 week range is between $12.81 and $47.98.
Morgan Stanley (MS) is currently trading at $13.93. Its 52 week range is between $11.58 and $24.46.
Groupon Inc (GRPN) is currently trading at $9.95. Its 52 week range is $8.8 and $31.14.
Spectrum Pharmaceuticals Inc (SPPI) is currently trading at $11.72. Its 52 week range is between $6.94 and $16.
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 China Already The World's Largest 'Owner' As Opposed To 'Holder' Of Gold? | ZeroHedge
- Homebuilder Confidence Misses For 4th Month In A Row | ZeroHedge
- Morning Euphoria Fizzles As Biotechs Turn Red Again | ZeroHedge
- European Investors Rush To Safe-Havens - Italy/Spain Bond Yields At New Record Low | ZeroHedge
- I Rode the Wave | iBankCoin.com
- US to Foreign Officials: Stop buying Treasuries | ZeroHedge
- Nigel Farage Blasts "There Is No Consent For A United States Of Europe" | ZeroHedge
The most relevant financial news and articles from the Internets
- 25 Ways to Make LinkedIn Work for You | BusinessWeek
- US Mobile Commerce Sales Are Up 100% Over Last Year | Business Insider
- Pre-Open... | StreetInsider.com
- NASA Is Testing A Flying Saucer For Landing On Mars | Business Insider
- Ocean City, Md.: America's Most Affordable Fun City | BusinessWeek
- North Korean Officials Go After London Salon For Making Fun Of Kim Jong-Un... | Business Insider
- The 25 Highest-Paid Athletes In The World | Business Insider