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
- Late Night Strategy for Thursday | iBankCoin.com
- Before and After Effects of Drugs | iBankCoin.com
- Energy and Staples Take the Money Cake Again | iBankCoin.com
- The Ultimate Cheat Sheet For Investing All of Your Money | Altucher Confidential
- The May Flowers | iBankCoin.com
- Jim Rickards on the Death of Money, China, and Financial Warfare | Financial Sense
- In "Flash Boys," Michael Lewis Misses the Point -- Deliberately | ZeroHedge
The most relevant financial news and articles from the Internets
- Why People Are Obsessed With Teen YouTube Star Bethany Mota... | Business Insider
- Kidnapper Kicks 10-Year-Old Boy... | Business Insider
- Celgene to Rise Like a Phoenix | TheStreet.com
- Hackers May Have Already Filed Your Taxes For You And Stolen Your Return | Business Insider
- Pre-... | StreetInsider.com
- Kass: Money Doesn't Talk, It Swears | TheStreet.com
- Apple Delivered The Ultimate 'Rashomon' Earnings Report Last Night (AAPL) | Business Insider