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
- Conference Board Leading Economic Index Increased Again in November | Financial Sense
- China Tests Nuclear ICBMs, US Analyst Warns "Arms Control Is Failing To Increase American Security" | ZeroHedge
- From Average Joe To Average Jihadi - How A Texas Plumber's Truck Turned Up In Syria | ZeroHedge
- Former BIS Chief Economist: "The System Is Dangerously Unanchored; It Is Every Man For Himself" | ZeroHedge
- Spotlight on the Fed | Financial Sense
- Russia’s Crisis Is Europe’s Crisis | Financial Sense
- Forget Lost Decade, Japan Has Been 'Lost' Since WWII | ZeroHedge
The most relevant financial news and articles from the Internets
- Researchers 'Averaged' The Faces Of 400 CEOs — And The Results Say A Lot About... | Business Insider
- N.Korea calls for joint probe with US into Sony hack | Business Insider
- 2012 Honda CR-V | BusinessWeek
- Iraq Kurds deliver aid to Mt Sinjar, expand operation | Business Insider
- These Are The 10 Best Used Cars For First-Time Drivers | Business Insider
- Microsoft Plans A Virtual Reality Headset For Xbox One... | Business Insider
- Lindsey Vonn claims 61st World Cup win in Val d'Isere | Business Insider