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
- Martin Shkreli Sets Out To Crush KaloBios Shorts: Will Stop Lending Out Shares | ZeroHedge
- Juncker Warns Euro Is Doomed, "Pointless" If Schengen Fails | ZeroHedge
- China Unleashes Perfect Storm Of Bad News Prompting Stock Market Plunge | ZeroHedge
- Experts See Low Oil Prices for Decades to Come as US Shale Boom Goes Global | Financial Sense
- Paris, Sharm el-Sheikh, and the Resurrection of Old Europe | Financial Sense
- The Triumph Of Materialism: The Average American Will Spend 830 Dollars On Christmas In 2015 | ZeroHedge
- Busted: Hillary Caught Coordinating With CNN To Smear Rand Paul | ZeroHedge
The most relevant financial news and articles from the Internets
- The Latest: March planned along Michigan Avenue in Chicago... | Business Insider
- Obama admin says states lack authority to block refugees | Business Insider
- Winds and high tides damage Alaska beach art installation... | Business Insider
- The best public high school in every state | Business Insider
- Supply Chain Management: The Next Big Thing? | BusinessWeek
- The band Eagles of Death Metal recalls the night their... | Business Insider
- J.K. Rowling just set the record straight on the most... | Business Insider