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
- Target2 Imbalances Grow: ECB Overtakes Greece as Third Largest Debtor | Financial Sense
- JPM Head Quant: Expect Up To $300 Billion In Program Selling, "5-10% Near-Term Downside To The S&P500" | ZeroHedge
- Economic Predictions for Summer 2016: The Epocalypse Keeps Crashing | ZeroHedge
- The End Game Of Bubble Finance - Political Revolt | ZeroHedge
- Philly Fed State Coincident Index Declines to Multi-Year Lows | Financial Sense
- Conference Board Leading Economic Index: Decrease in May | Financial Sense
- Why The Brits Really Voted "Leave" (In 3 Simple Cartoons) | ZeroHedge
The most relevant financial news and articles from the Internets
- Supply Chain Management: The Next Big Thing? | BusinessWeek
- 4 ways to get customers to buy more | Business Insider
- This finance trend is so hot even Amazon wants in (AMZN) | Business Insider
- Turkish police used tear gas to break up a Pride march | Business Insider
- Elizabeth Warren responds to... | Business Insider
- Clinton's campaign is going after Trump for... | Business Insider
- 14 scientific tricks to beat stress, anxiety, and fear | Business Insider