Covered Call Picks (IVN,NXY,MS,CTXS,AMD)
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.
Ivanhoe Mines Ltd (IVN) is currently trading at $18.57. Its 52 week range is between $12.11 and $29.29.
SandRidge Energy Inc (SD) is currently trading at $8.73. Its 52 week range is between $4.55 and $13.34.
Morgan Stanley (MS) is currently trading at $16.89. Its 52 week range is between $11.58 and $31.04.
Citrix Systems Inc (CTXS) is currently trading at $64.11. Its 52 week range is $50.21 and $88.49.
Advanced Micro Devices Inc (AMD) is currently trading at $5.71. Its 52 week range is between $4.31 and $9.58.
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
- Did Russia Hack the DNC … Really? | ZeroHedge
- Wikileaks Provides Status Update On Julian Assange And The US Election | ZeroHedge
- December Rate Hike Considerations | Financial Sense
- Walls, Going Viral | ZeroHedge
- Moody’s: The M&A Market Is Flashing a Red Warning Sign | Financial Sense
- Welcome To The George Orwell Theme Park Of Democracy | ZeroHedge
- Bank Of England Confirms: Debt Issuance Levels Tripled Since Quantitative Easing | ZeroHedge
The most relevant financial news and articles from the Internets
- Two major banks just paid for a cotton shipment on the... | Business Insider
- Donald Trump's 'big,... | Business Insider
- A 'war within a war' is brewing in Iraq — and the US is caught in the middle... | Business Insider
- Professional video game players make over seven figures to play '... | Business Insider
- FELDER: The probability of a market crash is... | Business Insider
- In a scary scene, a TCU football player started choking when his... | Business Insider
- A former Marine starts off mental-toughness coaching with an exercise... | Business Insider