Covered Call Picks (JCP,GRPN,DDD,BBRY,SD)
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.
|JCP||J C Penney Company Inc||21.6||22||1.7||7.90%||March 2013|
|GRPN||Groupon Inc||5.8||6||0.5||7.90%||March 2013|
|DDD||3D Systems Corp||54.9||55||4.3||7.80%||March 2013|
|BBRY||Research In Motion Ltd||13.9||14||1.1||7.60%||March 2013|
|SD||SandRidge Energy Inc||5.88||6||0.4||6.10%||March 2013|
J C Penney Company Inc (JCP) is currently trading at $21.55. Its 52 week range is between $15.69 and $42.05.
Groupon Inc (GRPN) is currently trading at $5.8. Its 52 week range is between $2.6 and $20.5.
3D Systems Corp (DDD) is currently trading at $54.89. Its 52 week range is between $20.5 and $71.98.
Research In Motion Ltd (BBRY) is currently trading at $13.88. Its 52 week range is between $6.22 and $18.32.
SandRidge Energy Inc (SD) is currently trading at $5.88. Its 52 week range is between $4.81 and $8.98.
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
- Germany Blesses "Bail-In" Deposit Confiscation Plan For Failing EU Banks | ZeroHedge
- 125 Years Ago... Or Today? | ZeroHedge
- Destroying The "Recessions Can't Happen Without A Yield Curve Inversion" Myth | ZeroHedge
- Tread At Your Own Peril | iBankCoin.com
- The Hot Summer Swimsuit Edition | iBankCoin.com
- Bull or Bear? | iBankCoin.com
- Consumer Credit Card Debt Tumbles, Non-Revolving Credit Soars Most In 15 Months | ZeroHedge
The most relevant financial news and articles from the Internets
- 5 Things You Should Do Before Every Big Presentation | Business Insider
- DELL: Here's Why Windows Tablets Can Become A Giant Business For Us (MSFT) | Business Insider
- The World's 25 Most Fragile, Vulnerable, And Dysfunctional States | Business Insider
- 5 Excellent Tips Every Startup Should Follow To Lure Investors | Business Insider
- The Best Business Schools of 2011 | BusinessWeek
- Insane Footage Of People Going Down The World’s Tallest Water Slide Will Give You... | Business Insider
- The 'Sharknado 2' Trailer Is As Ridiculous As You Expect It To Be | Business Insider