Covered Call Picks (OCZ,STP,MLNX,JAG,SQNM)
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.
OCZ Technology Group Inc (OCZ) is currently trading at $1.99. Its 52 week range is between $1.11 and $10.05.
Suntech Power Holdings Co Ltd (STP) is currently trading at $1.74. Its 52 week range is between $0.71 and $4.4.
Mellanox Technologies Ltd (MLNX) is currently trading at $51.69. Its 52 week range is between $30.55 and $120.05.
Jaguar Mining Inc (JAG) is currently trading at $0.93. Its 52 week range is between $0.58 and $7.35.
Sequenom Inc (SQNM) is currently trading at $4.15. Its 52 week range is between $2.65 and $5.83.
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
- Richmond Fed Confirms Weakest Economic Trend Since 2008 | ZeroHedge
- Bullish Or Bearish: The Illusion Of Permanent Liquidity | ZeroHedge
- We Can Prove the Podesta Emails Released by Wikileaks Are Authentic... Here's How | ZeroHedge
- Don Coxe: Raise Cash, Hold Gold | Financial Sense
- Tepid Demand For 2Y Paper: Bid-To-Cover Slides, Primary Dealers Hold More Than Half | ZeroHedge
- The Undercurrent of Currency Issues | Financial Sense
- Driverless Vehicles Coming Faster than You Think | Financial Sense
The most relevant financial news and articles from the Internets
- Greece just got permission to be massively bailed out again | Business Insider
- Philippines president tells US to 'forget' about important... | Business Insider
- Medicare paid chiropractors millions for bogus billings | Business Insider
- 3 experts who've read over 300,000 résumés share their... | Business Insider
- The Japanese yen is sliding | Business Insider
- One year after taking over the fantasy... | Business Insider
- A former Marine starts off mental-toughness coaching with an exercise... | Business Insider