Covered Call Picks (GRPN,VRNG,AMRN,NAV,FSLR)
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||11.3||12||1.6||14.10%||Sep-12|
|NAV||Navistar International Corp||25.2||26||2.7||10.50%||Sep-12|
|FSLR||First Solar Inc||21.4||22||1.7||7.80%||Sep-12|
Groupon Inc (GRPN) is currently trading at $6.93. Its 52 week range is between $6.35 and $31.14.
Vringo Inc (VRNG) is currently trading at $3.44. Its 52 week range is between $0.68 and $5.45.
Amarin Corporation PLC (AMRN) is currently trading at $11.34. Its 52 week range is between $5.99 and $15.96.
Navistar International Corp (NAV) is currently trading at $25.17. Its 52 week range is $20.07 and $48.18.
First Solar Inc (FSLR) is currently trading at $21.41. Its 52 week range is between $11.43 and $107.99.
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
- Hot Money, Cold Credit | Financial Sense
- Is Carl “give me three seats on your board” Icahn About to Teach the Kid a Lesson? | iBankCoin.com
- Gold And Silver Roundtrip To Friday's Close | ZeroHedge
- Reversal | ZeroHedge
- What Could Possibly Go Wrong Here? | ZeroHedge
- Trade Policy and Economic Decline | Financial Sense
- When A Money-Printing Butterfly Flaps Its Wings In Japan, This Is What Happens In Greece | ZeroHedge
The most relevant financial news and articles from the Internets
- Supply Chain Management: The Next Big Thing? | BusinessWeek
- Here's Why Chinese Moms Still Love Fisher Price Toys And Americans Don... | Business Insider
- New HD Video Of Oklahoma Tornado Gives The Clearest View Yet | Business Insider
- Jodi Arias Pleads For Mercy, Promises To Devote Her Life To Helping People | Business Insider
- 23-Year-Old Phenom Gareth Bale Agrees To Stay With Tottenham Despite The Team's... | Business Insider
- 'Easy Money' Over for Bank of America Stock: KBW | TheStreet.com
- Unusual 11 Mid-... | StreetInsider.com