Covered Call Picks (JCP,DNDN,TNA,ABX,BBRY)
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.
|JCP||J C Penney Company Inc||17.7||18||0.6||3.20%||May 2013|
|DNDN||Dendreon Corp||3.98||4||0.1||3.00%||May 2013|
|TNA||Direxion Daily Small Cap Bull 3X Shares||47.4||47.5||1.1||2.30%||May 2013|
|ABX||Barrick Gold Corp||20.9||21||0.4||2.10%||May 2013|
|BBRY||Research In Motion Ltd||15.5||16||0.3||1.90%||May 2013|
J C Penney Company Inc (JCP) is currently trading at $17.72. Its 52 week range is between $13.55 and $34.99.
Dendreon Corp (DNDN) is currently trading at $3.98. Its 52 week range is between $3.69 and $9.34.
Direxion Daily Small Cap Bull 3X Shares (TNA) is currently trading at $47.39. Its 52 week range is between $20.77 and $46.89.
Barrick Gold Corp (ABX) is currently trading at $20.88. Its 52 week range is between $17.51 and $43.3.
Research In Motion Ltd (BBRY) is currently trading at $15.54. Its 52 week range is between $6.22 and $18.32.
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
- Why Not Replace Bureaucrats with Robots? | Financial Sense
- Oil To $70? Or Down To $30? | ZeroHedge
- Homicides In These 4 Cities Are Spiking To The Highest Levels In 20 Years | ZeroHedge
- Live Feed: Riot Police And Humvees Move In To Remove Last Remaining Standing Rock Protesters | ZeroHedge
- Are Rate Hikes Bad For Gold? | ZeroHedge
- Meanwhile, In Every News Editor's Office Across America | ZeroHedge
- Futures Flat, Global Stocks Near Record High After Minutes Fail To Spark Dollar Rally | ZeroHedge
The most relevant financial news and articles from the Internets
- Former GE CEO Jack Welch says leaders... | Business Insider
- Apple fixed an annoying iPhone battery bug and didn't tell people for... | Business Insider
- The 17 shortest celebrity marriages of all time | Business Insider
- A professional... | Business Insider
- The Fed isn't sure whether Trump will be good or bad for the economy... | Business Insider
- Chip designers double down on the IoT | Business Insider
- Every shred of available evidence shows policies protecting LGBT... | Business Insider