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
- "Confidence Is Lost": Fred Hickey Says "Bear Market Will Last Until QE4" | ZeroHedge
- The Claws of Systemic Risk Are Popping Once Again | Financial Sense
- The Return Of Crisis | ZeroHedge
- "People In The Market For Many, Many Years Have Been Replaced By An Algorithm" | ZeroHedge
- Computerized Trading Creating Oil Price Volatility | ZeroHedge
- Hilsenrath: Yellen's Comments Have A "Downbeat Undertone" | ZeroHedge
- S&P Downgrades Banks With Highest Energy Exposure; Expects "Sharp Increase" In Non-Performing Assets | ZeroHedge
The most relevant financial news and articles from the Internets
- It's nearly impossible to describe the mind-blowing experience of virtual reality | Business Insider
- US agency: Google computer can be considered driver... | Business Insider
- 'China's back is completely up against the wall today' | Business Insider
- 5 luxurious things you must do when in St. Barths | Business Insider
- Here's your US recession ... | Business Insider
- Scientists are bashing authorities’ claims that a meteorite killed a bus driver in India... | Business Insider
- Amazon announces new board member, a $5B stock buyback, and an... | Business Insider