Covered Call Picks (DVAX,CSCO,FB,NFLX,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.
|DVAX||Dynavax Technologies Corp||4.74||5||0.5||10.50%||November 2012|
|CSCO||Cisco Systems Inc||16.9||17||0.5||2.80%||November 2012|
|FB||Facebook Inc||19.9||20||0.6||2.80%||November 2012|
|NFLX||Netflix Inc||79.6||80||1.8||2.30%||November 2012|
|FSLR||First Solar Inc||24.4||24.5||0.5||2.20%||November 2012|
Dynavax Technologies Corp (DVAX) is currently trading at $4.74. Its 52 week range is between $2.67 and $5.34.
Cisco Systems Inc (CSCO) is currently trading at $16.85. Its 52 week range is between $14.96 and $21.3.
Facebook Inc (FB) is currently trading at $19.86. Its 52 week range is between $17.55 and $45.
Netflix Inc (NFLX) is currently trading at $79.61. Its 52 week range is between $52.81 and $133.43.
First Solar Inc (FSLR) is currently trading at $24.4. Its 52 week range is between $11.43 and $51.89.
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
- Hillary Will Be The Least Of Your Worries - America Has Economic Diarrhea | ZeroHedge
- World's Most Exclusive Club | ZeroHedge
- 8th Year Presidential Cycle Predicts Trouble for the Rest of 2016 | Financial Sense
- Dear Janet, Thanks For Helping The Average American | ZeroHedge
- Podcast: Quantum Computing Takes Flight | Financial Sense
- Junk Economics: Michael Hudson Rages "Wall Street Has Taken Over The Economy.. & Is Draining It" | ZeroHedge
- Market Recap Apr 27, 2016 | FundMyMutualFund
The most relevant financial news and articles from the Internets
- Peter Thiel and Mitt Romney invested $100 million in a company that wants to... | Business Insider
- These 2 cognitive biases are an investor's worst enemies | Business Insider
- Baltimore police shot a 13-year-old boy who was... | Business Insider
- If your city doesn't already have a Chipotle, it sounds like you're not... | Business Insider
- Microsoft just locked people out of using Google with a key... | Business Insider
- The 50 best companies to work for in America | Business Insider
- 17 counterintuitive salary negotiation tricks that actually work | Business Insider