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
- Who Will Suffer From A Leveraged Credit Shakeout? | ZeroHedge
- 20-Year CBS News Veteran Details Massive Censorship And Propaganda In Mainstream Media | ZeroHedge
- The 2014 Stealth Bear Market – A Transition or a Top? | Financial Sense
- Gold Falls, Stocks Record Highs as Japan Goes ‘Weimar’, “Here Be Dragons” | ZeroHedge
- The "Carry Trade" For The Working Man | ZeroHedge
- Why We're Poorer: Inflation And Deflation Are Now Globalized | ZeroHedge
- Charting Banzainomics: What The BOJ's Shocking Announcement Really Means | ZeroHedge
The most relevant financial news and articles from the Internets
- Afghanistan's Opium Industry Now Employs More People Than Its Military | Business Insider
- Sweden Formally Recognized Palestine — And Israel Responded With A Joke About IKEA | Business Insider
- Lego Is for Girls | BusinessWeek
- Biotech Stock Mailbag: Prosensa, Sarepta, Arena Pharma, Hemispherx | TheStreet.com
- The Second Languages Of Every Part Of The World In One... | Business Insider
- Eurozone inflation up, unemployment steady: Eurostat | Business Insider
- Retirement Isn't a Pipe Dream -- and Here's How to Make It Happen | TheStreet.com