Covered Call Picks (YOKU,GMCR,BAC,CLF,UPL)
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.
|GMCR||Green Mountain Coffee Roasters Inc||51.4||52.5||2.7||5.30%||Apr-12|
|BAC||Bank of America Corp||9.8||10||0.4||4.20%||Apr-12|
|CLF||Cliffs Natural Resources Inc||72||72.5||2.9||4.00%||Apr-12|
|UPL||Ultra Petroleum Corp||24.9||25||1||4.00%||Apr-12|
Youku Inc (YOKU) is currently trading at $27.06. Its 52 week range is between $13.76 and $69.95.
Green Mountain Coffee Roasters Inc (GMCR) is currently trading at $51.39. Its 52 week range is between $34.06 and $115.98.
Bank of America Corp (BAC) is currently trading at $9.8. Its 52 week range is between $4.92 and $14.29.
Cliffs Natural Resources Inc (CLF) is currently trading at $72.03. Its 52 week range is $47.31 and $102.48.
Ultra Petroleum Corp (UPL) is currently trading at $24.9. Its 52 week range is between $22.51 and $51.2.
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 Fed Is "Confused & Confusing" | ZeroHedge
- Judge Rules Obama's Abuse Of Executive Orders Is "Unconstitutional" | ZeroHedge
- Watch As NYPD Officers Turn Their Backs On NYC Mayor Bill de Blasio | ZeroHedge
- Dollar Bulls Regain Upper Hand | ZeroHedge
- Competitive Theories: “Deflation Warning” vs. “Inflation Is Nearly Everywhere” | Financial Sense
- Recent Hindenburg Omens Signaled Caution, Now What? | Financial Sense
- What Are Technical Indicators Saying About the Market? | Financial Sense
The most relevant financial news and articles from the Internets
- SONY: No VOD Distributor Will Release 'The Interview' | Business Insider
- Sony Picked One Of The Worst Possible Times To Release A Movie Making Fun Of... | Business Insider
- Google Is Letting Companies Rack Up Thousands In Ad Revenue — And... | Business Insider
- Virginia Town is Best Place in the U.S. to Raise Kids | BusinessWeek
- Muhammad Ali hospitalized with 'mild' pneumonia | Business Insider
- Streetinsider.com's Hot Lunchtime... | StreetInsider.com
- The Story Behind The Westminster Child Abuse Scandal | Business Insider