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
- Mysterious Chinese Buyer Of Record Crude Oil Cargoes Revealed | ZeroHedge
- Out For A Loss | iBankCoin.com
- U.S. Regulators Easing Mortgage Credit Requirements | Financial Sense
- Putin To Western Elites: Play-Time Is Over | ZeroHedge
- Why '75' Is The Most Important Number For US Economic Hope | ZeroHedge
- Caption Contest: "So Bullish It Hurts" Edition | ZeroHedge
- Russian Ruble Soars Over 5% (Swings Most Since 1998) On Intervention, Rate-Hike Rumors | ZeroHedge
The most relevant financial news and articles from the Internets
- Paralympian Josh Sundquist Already Has The Best Halloween Costume This Year | Business Insider
- Samsung posts 48.8% drop in Q3 net profit | Business Insider
- The Antares Rocket Explosion Took 1,254 Pounds Of Student Science... | Business Insider
- First class Murray books ticket to London | Business Insider
- Seth Rogen To Play Steve Wozniak In Steve Jobs Biopic | Business Insider
- Here's The Maserati That Will Help The Brand Bust Out In The US | Business Insider
- Steve Ballmer Just Tore Into Amazon, Sang Some Bing Crosby And Fergie Songs, And Shouted A... | Business Insider