Covered Call Picks (MCP,NFLX,FB,LCC,BBY)
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.
Molycorp Inc (MCP) is currently trading at $8.78. Its 52 week range is between $5.75 and $35.79.
Netflix Inc (NFLX) is currently trading at $103.44. Its 52 week range is between $52.81 and $133.43.
Facebook Inc (FB) is currently trading at $30.95. Its 52 week range is between $17.55 and $45.
US Airways Group Inc (LCC) is currently trading at $14.67. Its 52 week range is between $5.81 and $15.5.
Best BUY Co Inc (BBY) is currently trading at $14.48. Its 52 week range is between $11.2 and $27.95.
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
- Banks Outperform the Market With Regional Banks Pulling Ahead | Financial Sense
- Japan Press: "China-Japan War To Break Out In January" | ZeroHedge
- Sunday Morning Quote | iBankCoin.com
- Market’s Bill of Health – Momentum Continues to Weaken | Financial Sense
- The 1% Also Don't Pay Their Bills: 10 Ultra Luxury Properties In Foreclosure | ZeroHedge
- 2014: Gold Up 70% or U.S. Equities Down 40%? | Financial Sense
- This One Has Been Laying Low | iBankCoin.com
The most relevant financial news and articles from the Internets
- University Of Oregon Investigating Viral Video Of Students Pelting A Retired... | Business Insider
- Disgraced Ex-San Diego Mayor Bob Filner Sentenced To Three Months Of Home... | Business Insider
- This Sleeping Bag-Inspired Blanket Is Even Better Than The Snuggie | Business Insider
- China Took An Important Step Towards Liberalizing Interest Rates This Weekend | Business Insider
- Yes, We Should Extend Unemployment Benefits — Here's Why... | Business Insider
- FLECKENSTEIN: Everyone Betting On Bitcoin Will Lose All Of Their Money | Business Insider
- Kristen Wiig Returns To 'SNL' To Parody 'The Sound Of Music' | Business Insider