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
- The Counter-Intuitive Rise of the U.S. Dollar | Financial Sense
- Market Crash 2014 | ZeroHedge
- Can Market Forces Prevail: The Eurozone’s Unresolved Situation | ZeroHedge
- Mixed on Durables and Jobless Claims | Financial Sense
- How Much Further Can Gold Fall? | Financial Sense
- Saut: Dow Theory Says Primary Trend Still Positive Though Short-Term Caution Advised | Financial Sense
- Brazil Crashes As Rousseff Regains Lead | ZeroHedge
The most relevant financial news and articles from the Internets
- The Saints Let Go Of A Bunch Of Players To Sign A $54-Million Free Agent, And It's... | Business Insider
- China Has Been Tightening Its Grip On Hong Kong For A Long Time | Business Insider
- Stunning Drone Footage Shows Just How... | Business Insider
- Supply Chain Management: The Next Big Thing? | BusinessWeek
- Jeff Goldblum Strips To His Undies In Hilarious... | Business Insider
- Here's The Video That Made 9-11 Truthers Think A Senator Was On... | Business Insider
- The Market Is Getting Smoked Again (SPY, DIA, QQQ, TLT, IWM) | Business Insider