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
- Q3 GDP Rises 3.5% Despite Sharp Slowdown In Consumption, Pushed Higher By Government Spending Spree | ZeroHedge
- The 2014 Stealth Bear Market – A Transition or a Top? | Financial Sense
- Today’s Movers | iBankCoin.com
- Dow Is Up 110 Points, Visa Is 120 Of Them | ZeroHedge
- Goldman Expects "Steady As She Goes" FOMC With QE Ending On Schedule | ZeroHedge
- Market Boosted by Caterpillar (CAT) Earnings | Financial Sense
- STTG Market Recap October 28, 2014 | FundMyMutualFund
The most relevant financial news and articles from the Internets
- Apple CEO Tim Cook Just Came Out As Gay (AAPL) | Business Insider
- One Stock Is Responsible For 109 Points Of The Dow Rally | Business Insider
- German Unemployment Takes An Unexpected Plunge | Business Insider
- This 10-Year-Old Is Earning An Insane Amount To Star In Steven Spielberg... | Business Insider
- 2012 Honda CR-V | BusinessWeek
- SodaStream to close controversial West Bank plant | Business Insider
- RUPKEY: Rate Hikes Are Coming Sooner Than You Think (DIA, SPY, QQQ, IWM) | Business Insider