Covered Call Picks (GMCR,KERX,HLF,KORS,NFLX)
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 $48.94. Its 52 week range is between $17.11 and $71.15.
Keryx Biopharmaceuticals Inc (KERX) is currently trading at $6.73. Its 52 week range is between $1.28 and $9.98.
Herbalife Ltd (HLF) is currently trading at $35.79. Its 52 week range is between $24.24 and $73.
Michael Kors Holdings Ltd (KORS) is currently trading at $55.87. Its 52 week range is between $31.75 and $60.
Netflix Inc (NFLX) is currently trading at $184.41. Its 52 week range is between $52.81 and $177.89.
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
- Shell's New Permian Play Profitable At $20 A Barrel | ZeroHedge
- "If They Want To Blow It Up, They Can" - How Republicans Can Hobble Healthcare Without Repeal | ZeroHedge
- "We've Reached Our Limits" - Greece Begins Blocking Refugees | ZeroHedge
- White House On Lockdown As Secret Service Investigate "Suspicious Package" | ZeroHedge
- Italian Officials Call For Investigation Of George Soros Supported NGO Migrant Fleet | ZeroHedge
- What Obamacare’s Failure Means for America | Financial Sense
- House Intel Committee Cancels All Meetings For The Week: "Playing An Absurb Political Game" | ZeroHedge
The most relevant financial news and articles from the Internets
- 8 money mistakes the middle class keeps making | Business Insider
- Sony and Marvel just dropped another 'Spider-Man... | Business Insider
- The world's rarest and most ancient dog has just been re-discovered in the wild... | Business Insider
- Senator seeks ethics probe of Mnuchin's comment... | Business Insider
- Get Frye boots and bags for up to half off — and more of today's best deals from around the web | Business Insider
- The 'hot hand' isn't a fallacy — science shows momentum really shapes a game... | Business Insider
- Tinder is testing a new feature that makes it easier to chat with your... | Business Insider