Covered Call Picks (AMRN,VQ,ALXA,GRPN,VHC)
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.
|AMRN||Amarin Corporation PLC||14.9||15||2.8||18.80%||Aug-12|
|ALXA||Alexza Pharmaceuticals Inc||3.86||4||0.5||11.70%||Aug-12|
|VHC||VirnetX Holding Corp||40.4||41||3.9||9.70%||Aug-12|
Amarin Corporation PLC (AMRN) is currently trading at $14.92. Its 52 week range is between $5.99 and $15.6.
Venoco Inc (VQ) is currently trading at $9.5. Its 52 week range is between $6.5 and $14.94.
Alexza Pharmaceuticals Inc (ALXA) is currently trading at $3.86. Its 52 week range is between $2.55 and $18.4.
Groupon Inc (GRPN) is currently trading at $7.67. Its 52 week range is $7.25 and $31.14.
VirnetX Holding Corp (VHC) is currently trading at $40.4. Its 52 week range is between $11.01 and $41.77.
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
- Japan Stock Market Crash Leads To Global Sell Off | ZeroHedge
- Anthony Weiner To Prop Up NYC Mayoral Campaign With Many More Naked Pictures Of Himself | ZeroHedge
- Trapping In The Suckers | iBankCoin.com
- Guest Post: What 9 Company Hedge Books Are Revealing About The Natural Gas Market | ZeroHedge
- Visualizing Public/Private Debt Since 1990 | Financial Sense
- Check Out These Hot Looks Before Your Hot Weekend in the Hamptons | iBankCoin.com
- THERE’S NO PAINLESS WAY TO KILL YOURSELF | Altucher Confidential
The most relevant financial news and articles from the Internets
- HOUSE OF THE DAY: Ellen DeGeneres And Portia De Rossi Bought A Stunning... | Business Insider
- Satellite Pictures Show A Revolution Waiting To Happen In Bahrain | Business Insider
- Charles Schwab: Investors Will Benefit From A 'More Cyclical Stance' | Business Insider
- 15 Things I Wish I Knew As A First Year Investment Banking Analyst | Business Insider
- CHART OF THE DAY: The Japanese Nikkei's Historic Plunge In Context | Business Insider
- The CIA Used Emoticons When They Hashed Out Benghazi Talking Points | Business Insider
- Ocean City, Md.: America's Most Affordable Fun City | BusinessWeek