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
- Gartman Goes From "Stock Prices Have A Long Way To Fall" To "I'm Confused But Still Buying Stocks" In 7 Days | ZeroHedge
- Three Drivers of the Capital Markets in the Week Ahead | ZeroHedge
- The Big Four Economic Indicators: Close to New All-Time High | Financial Sense
- Three US Citizens Sentenced For Conspiracy To Start A Revolution Using WMDs | ZeroHedge
- Goldman Warns This Extreme Indicator "Is Rare Outside Of A Recession" | ZeroHedge
- Dis-Integrating America | ZeroHedge
- America’s Ballooning Student Debt: Lessons Learned From Chile | Financial Sense
The most relevant financial news and articles from the Internets
- Which Is America's Best City? | BusinessWeek
- 12 apps you need to plan the perfect wedding | Business Insider
- Russia and China could be 'making it impossible for the US to hide' its... | Business Insider
- Flying Roma send Juventus to second straight defeat | Business Insider
- Horror film legend Wes Craven dies at 76 | Business Insider
- ICC trial of Congolese 'Terminator' warlord to start | Business Insider
- Seattle is considering a crazy workaround to let Uber... | Business Insider