Covered Call Picks (GMCR,JCP,DDD,KORS,HLF)
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.
Green Mountain Coffee Roasters Inc (GMCR) is currently trading at $43.28. Its 52 week range is between $17.11 and $71.15.
J C Penney Company Inc (JCP) is currently trading at $21.01. Its 52 week range is between $15.69 and $43.18.
3D Systems Corp (DDD) is currently trading at $62. Its 52 week range is between $18.93 and $71.98.
Michael Kors Holdings Ltd (KORS) is currently trading at $57.47. Its 52 week range is between $29.32 and $60.
Herbalife Ltd (HLF) is currently trading at $38.67. Its 52 week range is between $24.24 and $73.
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
- Greek Supermarkets Begin To Resemble Those Of Venezuela | ZeroHedge
- "Off The Grid" Indicators Suggest US Economy Not Ready For 'Liftoff' | ZeroHedge
- Strap In! China Is Crashing Again | ZeroHedge
- Late Night Talkin’ Greasy | iBankCoin.com
- Earnings Preview - Second Quarter 2015 | Financial Sense
- A 14 Year Old Explains Why Socialism Fails | ZeroHedge
- Great Graphic: Central Banks Snap Up Treasuries | Financial Sense
The most relevant financial news and articles from the Internets
- 10 things you need to know before the opening bell (DIA, SPX, SPY, QQQ, GE, AAPL) | Business Insider
- How to overcome the pressure of checking your email all the... | Business Insider
- There's a massive shift in the way people are watching TV... | Business Insider
- Aboriginal experience inspires artist Abramovic decades... | Business Insider
- In 'first', IS beheads two women in Syria: monitor | Business Insider
- Bill Gates is investing $2 billion in renewable technology over the... | Business Insider
- This will be the trickiest market for traders on Monday (EUR, USD, AUD, NZD, ZAR, TRY, BRL... | Business Insider