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
- Total State Or Total Freedom: The 8 Marks Of Fascist Policy | ZeroHedge
- Capitalism Works If Government Would Just Get Out of the Way! | Financial Sense
- Buybacks Tank - Will Stocks Follow? | Financial Sense
- "We Are At A Point Where The Encroachment Of Government Power Has Historically Resulted In Rebellion" | ZeroHedge
- What Went Wrong Yesterday | ZeroHedge
- Joe Biden Humiliated In Turkish "Appeasement" As Erdogan Bombs US Allies In Syria | ZeroHedge
- A Kingdom In Turmoil: Saudi Societal Discontent Grows | ZeroHedge
The most relevant financial news and articles from the Internets
- Here's a cautionary tale about why we shouldn... | Business Insider
- The fintech ecosystem explained | Business Insider
- Nobody knows if lab meat is safe | Business Insider
- A neuroscientist injected monkeys with rabies to study stress, and the... | Business Insider
- Microsoft is trying harder to silence internet haters | Business Insider
- 19 Easter eggs hidden within your Google search bar (GOOG) | Business Insider
- Germany, Poland and France call for more efforts... | Business Insider