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
- NFIB Chief Economist Warns "Bubble In US Net Worth Has Reached Unsustainable Heights" | ZeroHedge
- Bondholders “Bailed In” In Austria - EU Bondholders Today, U.S. Depositors Tomorrow? | ZeroHedge
- Ferguson Cop Cleared Of Civil Rights Violations | ZeroHedge
- The Psychology of a Sideways Trend | Financial Sense
- Global Oil Glut Could Further Depress Oil Prices | Financial Sense
- Caught On Tape: LAPD Guns Down Homeless Man In Broad Daylight | ZeroHedge
- BLuE DReSS SHaDoW... | ZeroHedge
The most relevant financial news and articles from the Internets
- Afghanistan face Australia test as Pakistan aim to press... | Business Insider
- Why the hottest phone company in the world won't sell in the US | Business Insider
- A college with a $94 million endowment is shutting its doors, and people in higher ed should... | Business Insider
- 10 things you need to know before European markets open | Business Insider
- Robert Downey Jr. doesn't just star in HTC's latest TV ad... | Business Insider
- US billionaire says WWII Japanese ship found in... | Business Insider
- TAKFIRINOMICS: How ISIS funds its caliphate | Business Insider