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
- Meanwhile, Traders Are Getting Angrier With Every Passing Day | ZeroHedge
- Obamacare To Unveil "Price Shock" One Week Before The Elections | ZeroHedge
- Dollar Doldrums To Continue As "Fantasy World Of Rate Normalization" Unwinds | ZeroHedge
- Caught On Tape: Raw Footage Shows The Moment A Missile Hits Aleppo Hospital | ZeroHedge
- Three In A Row... | ZeroHedge
- There's Only One 'Honest' Position On Obama-Trade - Kill It | ZeroHedge
- Indiana's Over: Sanders Hammers Hillary, Trump Crushes Cruz - Speech Livestream | ZeroHedge
The most relevant financial news and articles from the Internets
- 7 things to teach your kids if you want them to... | Business Insider
- Argentina is trolling Trump to hype a big international soccer... | Business Insider
- An NYC restaurant created a doughnut that has a cinnamon roll hidden inside | Business Insider
- Venezuela can learn something from Saudi Arabia | Business Insider
- An NYC restaurant has a unique twist on eggs Benedict | Business Insider
- The Eagles say they won't trade Sam Bradford, and now their quarterback situation is... | Business Insider
- 28 brilliant questions to ask at the end of every job interview | Business Insider