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
- Here Is What Americans Spent Their "Gas Savings" On | ZeroHedge
- Changing Trends: Stocks, Bonds, Gold, the U.S. Dollar, and Oil | Financial Sense
- Stocks End Best Month Since Oct 2011 With A Whimper | ZeroHedge
- How Much Crude Oil Do You Consume on a Daily Basis? | Financial Sense
- Prominent Politician And Putin Critic Shot To Death In Moscow; "Shocked" John Kerry Urges Russia To Bring Justice | ZeroHedge
- ECB Warns UK: Excluding Russia From SWIFT "Could Undermine Confidence In The Whole System" | ZeroHedge
- 2-Year T-Note Shows Path for FOMC | Financial Sense
The most relevant financial news and articles from the Internets
- Why our brains see the black and blue dress as white and gold | Business Insider
- Natural disasters used to be so much worse | Business Insider
- Here's what we saw at 'Whisky Live' — a big New York City fair for whisky lovers | Business Insider
- Warren Buffett is endorsing one of the hottest startups on the planet | Business Insider
- There are tantalizing signs of liberal reforms in North... | Business Insider
- Supply Chain Management: The Next Big Thing? | BusinessWeek
- Virginia Town is Best Place in the U.S. to Raise Kids | BusinessWeek