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
- How Constant Is Gold’s Purchasing Power? | ZeroHedge
- Wells Fargo To Be Sanctioned By DOJ For Improperly Seizing Soldiers' Cars | ZeroHedge
- The Italian Referendum: What You Need To Know | ZeroHedge
- Robots Will Soon Take Over Building London Skyscrapers, Major UK Construction Firm CEO Warns | ZeroHedge
- What's The Opposite Of "Nailed It"? | ZeroHedge
- This Is How Much Liquidity Deutsche Bank Has At This Moment, And What Happens Next | ZeroHedge
- Why Even Racists Need The Freedom To Speak | ZeroHedge
The most relevant financial news and articles from the Internets
- Oil is going through the roof after a report that OPEC reached a deal to limit production... | Business Insider
- A celebrity chef says a pair of spring-loaded tongs is the one tool no kitchen should be... | Business Insider
- THE LIVE STREAMING VIDEO... | Business Insider
- A UPenn psychologist says 'grit' is key to success in life — here's how to become a... | Business Insider
- International investigation: The missile... | Business Insider
- No school produces more NFL players than the University of Alabama | Business Insider
- Look at how many executives have left Twitter over the years | Business Insider