Covered Call Picks (VRNG,AMRN,ZNGA,ISIS,GRPN)
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.
|VRNG||Vringo Inc||3.19||3.5||0.8||25.10%||November 2012|
|AMRN||Amarin Corporation PLC||12||12||1.8||15.00%||November 2012|
|ZNGA||Zynga Inc||2.84||3||0.3||10.20%||November 2012|
|ISIS||Isis Pharmaceuticals Inc||14||15||1.4||10.00%||November 2012|
|GRPN||Groupon Inc||4.7||5||0.5||9.60%||November 2012|
Vringo Inc (VRNG) is currently trading at $3.19. Its 52 week range is between $0.68 and $5.45.
Amarin Corporation PLC (AMRN) is currently trading at $11.99. Its 52 week range is between $5.99 and $15.96.
Zynga Inc (ZNGA) is currently trading at $2.84. Its 52 week range is between $2.66 and $15.91.
Isis Pharmaceuticals Inc (ISIS) is currently trading at $14.04. Its 52 week range is between $6.25 and $15.61.
Groupon Inc (GRPN) is currently trading at $4.7. Its 52 week range is between $4 and $31.14.
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
- Quote of the Morning | iBankCoin.com
- The “New Normal” in EM Ex-China | Financial Sense
- Ottawa Shooter Idenfitied As Canadian National Michael Zehaf Bibeau, Whose Passport Was Recently Seized | ZeroHedge
- Harley Bassman: "The Fed Is Trying To Land A Jumbo Jet On A Football Field" | ZeroHedge
- Is This the Beginning of a New Bear Market? Important Signs to Watch | Financial Sense
- Equity Levitation Stumbles After Second ECB Denial Of Corporate Bond Buying, Report Of 11 Stress Test Failures | ZeroHedge
- It Will Take 398,879,561 Years To Pay Off The US Government's Debt | ZeroHedge
The most relevant financial news and articles from the Internets
- Jim Cramer on Yahoo! CEO Marissa Mayer: A Job Well Done! | TheStreet.com
- Ebola Has Now Spread To Mali | Business Insider
- HILLARY CLINTON: Women In America Are Owed Money | Business Insider
- REPORT: At Least 11 Banks Are About To Fail Europe... | Business Insider
- Streetinsider.com's Hot Lunchtime... | StreetInsider.com
- Ben Bernanke Gave A Private Speech To High-Powered Investors In Tokyo, Here's What He... | Business Insider
- REPORT: JP Morgan Knew That Something Was Off About Hiring In China | Business Insider