Covered Call Picks (VVUS,DNDN,SHLD,FSLR,SINA)
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.
|SHLD||Sears Holdings Corp||54.9||55||4.8||8.70%||Mar-12|
|FSLR||First Solar Inc||39.7||40||3.4||8.60%||Mar-12|
Vivus Inc (VVUS) is currently trading at $11.18. Its 52 week range is between $6 and $13.18.
Dendreon Corp (DNDN) is currently trading at $14.49. Its 52 week range is between $6.46 and $43.96.
Sears Holdings Corp (SHLD) is currently trading at $54.86. Its 52 week range is between $28.89 and $94.79.
First Solar Inc (FSLR) is currently trading at $39.71. Its 52 week range is $29.87 and $175.45.
SINA Corp (SINA) is currently trading at $68.69. Its 52 week range is between $46.86 and $147.12.
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
- Obama’s Legacy Will Be Forever Etched in Halls of the Federal Reserve | ZeroHedge
- ECRI Weekly Leading Index: "Disentangling Cyclical from Structural" | Financial Sense
- "Is This Thing Still On?" Obama Returns To Personal Twitter | ZeroHedge
- Asian Media Warns Of Conflict, Economic Turmoil Under "Trump World Order" | ZeroHedge
- California Governor Jerry Brown Admits To $1.5 Billion "Math Error" In State Budget | ZeroHedge
- The Inheritance | Financial Sense
- Republicans, Democrats, and Voodoo Economics | ZeroHedge
The most relevant financial news and articles from the Internets
- Neil deGrasse Tyson explains what the world will be like in 500... | Business Insider
- Theresa May believes Trump recognises the importance of NATO... | Business Insider
- BERNSTEIN: 'We are one tweet away from … well, almost anything really... | Business Insider
- Trump's infrastructure plan probably won't provide a big boost... | Business Insider
- This $250M mansion is the most expensive home for sale... | Business Insider
- We tested what might be one of the best pairs of sweatpants out there | Business Insider
- The money management business could reach 'a turning point' in... | Business Insider