Covered Call Picks (CLSN,MBI,GMCR,MCP,AGO)
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.
Celsion Corp (CLSN) is currently trading at $7.58. Its 52 week range is between $1.63 and $7.86.
MBIA Inc (MBI) is currently trading at $8.56. Its 52 week range is between $6.78 and $13.5.
Green Mountain Coffee Roasters Inc (GMCR) is currently trading at $28.95. Its 52 week range is between $17.11 and $71.15.
Molycorp Inc (MCP) is currently trading at $8.47. Its 52 week range is between $5.75 and $35.79.
Assured Guaranty Ltd (AGO) is currently trading at $13.9. Its 52 week range is between $9.22 and $19.04.
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
- Young and Dumb Again | Financial Sense
- And The Person Responsible For Japan's Economic Endgame Is... Paul Krugman | ZeroHedge
- Credit Markets Signaling Near-Term Caution | Financial Sense
- Notes on Russia | Financial Sense
- Year-End Rally | Financial Sense
- Russia Can Survive An Oil Price War | ZeroHedge
- 5 Things To Ponder: Rising Risk | ZeroHedge
The most relevant financial news and articles from the Internets
- The Sun Asked People To Fly The Flag For #WhiteVanGate ... And Twitter Responded In... | Business Insider
- Notable Mergers and Acquisitions of the... | StreetInsider.com
- Why It's Important That A Georgia O'Keeffe Painting Sold For $44... | Business Insider
- Wall Street Buys Retailers on High Hopes for Holiday Shopping Season | TheStreet.com
- How Successful People Make The Most Of Their Weekends | Business Insider
- This Anonymous Account Of A UVA Rape Case Is Utterly Heartbreaking | Business Insider
- Here's What It Will Feel Like To Ride The World's... | Business Insider