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
- Loonie Plunges As Canadian Central Bank Warns "Rate Cuts Remain On The Table" | ZeroHedge
- Playing The Trump Effect On FX Markets | ZeroHedge
- Russia Snaps, Accuses UK, Germany And France Of "Grossly Interfering" In The US Election | ZeroHedge
- Assange's Lawyer Provides An "Out": Says Conditions Not Met For Extradition Deal | ZeroHedge
- Nothing Is Real: When Reality TV Programming Masquerades As Politics | ZeroHedge
- The World’s Most – And Least – Miserable Countries in 2016 | ZeroHedge
- The Truth About Venezuela's "Economic War" | ZeroHedge
The most relevant financial news and articles from the Internets
- A dead 'Game of Thrones' character could return next season in the... | Business Insider
- Sociology professor suggests mass murder could be seen as a... | Business Insider
- Salesforce CEO Marc Benioff sees a huge sales opportunity under Trump's... | Business Insider
- How Apple is taking a page out of the Netflix playbook with its Apple Music... | Business Insider
- Gas and housing prices pushed up America's cost of living in December... | Business Insider
- People who hate their jobs may be more likely to drive dangerously on the... | Business Insider
- Seth Meyers fires back at Trump for 'racist' attack on civil rights icon... | Business Insider