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
- China Prepares To Bailout Russia | ZeroHedge
- An Interesting Play Off Cheap Brent and The Destruction of US Oil Production | iBankCoin.com
- Small Nibbles, Just in Case | iBankCoin.com
- The Bears Are Who We Thought They Were | iBankCoin.com
- The "Unequivocally 'Not' Good" Reality Of Lower Oil Prices & Jobs | ZeroHedge
- Soaring Inflation Around The Globe: Cartier Hikes Russian Prices By 50%, Suntory Whiskey Prices Surge 25% In Japan | ZeroHedge
- A Pessimist's Guide To The World In 2015 | ZeroHedge
The most relevant financial news and articles from the Internets
- US cinemas cancel film parody of N.Korea leader after... | Business Insider
- Warming leads to more run-ins with polar bears | Business Insider
- Venture Capital Legend John Doerr Tells Us How To Spot The Next Tech Superstar | Business Insider
- Drones Are Coming, Facebook Makes Changes: 5 More Tech Predictions for 2015 | TheStreet.com
- 11 Mind-Blowing Facts About North Korea | Business Insider
- Lego Is for Girls | BusinessWeek
- Dick Cheney Had A Much Different Take On The US And Torture In... | Business Insider