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
- The ECB Is Considering A Parallel Greek Currency | ZeroHedge
- Early Q1 Reports Come In | Financial Sense
- Modern-Day Monetary Cranks and the Fed's "Inflation" Target | ZeroHedge
- GE Gets Out at the Top | Financial Sense
- The Minimum Price for Gold, Part II | ZeroHedge
- How Children Of The 0.001% Choose Their College | ZeroHedge
- Jobless Claims, Housing Starts and Earnings Results in Focus | Financial Sense
The most relevant financial news and articles from the Internets
- How to invest your cash if you're convinced the stock market is about to tank... | Business Insider
- Hallucinogens Legally Sold as 'Bath Salts' a New Threat | BusinessWeek
- Science explains why everything you've heard about eating meat is wrong... | Business Insider
- 24 of the toughest interview questions heard at Facebook | Business Insider
- Why some people believe Mark Zuckerberg's plan to bring cheap... | Business Insider
- 3 of Jane Goodall's devastating predictions for 2050 are already coming true... | Business Insider
- 'CRYING ON WALL STREET' If Comcast's $45 billion mega-deal falls... | Business Insider