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
- Prepare For GDP Downgrades: Eurasian Snow Flashes Polar Vortex 2.0 Warning | ZeroHedge
- Neutralized into the Bell | iBankCoin.com
- Futures Market Expects Fed to Delay Rate Hikes for a Year | Financial Sense
- The Wrong Idea About Inflation | Financial Sense
- The Big Skew by Big Blue | iBankCoin.com
- New Tesla Model S May Have Us Rethink Electric Cars | Financial Sense
- Big Four Economic Indicators Near Stall Speed | Financial Sense
The most relevant financial news and articles from the Internets
- In South Korea, Competitive Video Games Are Almost As Popular As Soccer | Business Insider
- Nearly Eight Years Into The Drug War, These Are Mexico's 7 Most Notorious... | Business Insider
- This Might Be The Worst Job At An Ebola Clinic | Business Insider
- Obama Might Try To Circumvent Congress On An Iran Deal — And He's Already Getting An... | Business Insider
- Rodgers salutes resilient Sterling | Business Insider
- 12 Books That Jeff Bezos Thinks Everyone Should Read | Business Insider
- EU's Barroso warns Britain against bloc exit | Business Insider