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
- "We Live In A Dystopic, Orwellian Ball Of Crazy" | ZeroHedge
- Why Real Reform Is Impossible: We Can't Believe The Mighty Titanic Could Actually Sink | ZeroHedge
- "Hope" Fades As Consumer Confidence Ignores Stock Market Exuberance | ZeroHedge
- Miami Police Station Evacuated, Bomb Squad Detonates Suspicious Package | ZeroHedge
- Why I'm Supporting The "Demonic Creature That Emerged From The Depths Of Hell" In This Year's Election | ZeroHedge
- "Short Everything That Guy Has Touched" - San Fran's Lending Standards Put The Last Housing Bubble To Shame | ZeroHedge
- Meanwhile At The DNC | ZeroHedge
The most relevant financial news and articles from the Internets
- You shouldn't pop most zits — but there is one that you... | Business Insider
- Ford’s CFO just raised an unexpected red flag about the US car market... | Business Insider
- If you want to get a bigger salary and expand your skill set, this is the coding class you should... | Business Insider
- THE MOBILE APP-INSTALL AD REPORT: Spending forecasts, performance and price trends, and... | Business Insider
- Behold the most expensive weapons system ever and all of its ammunition in one... | Business Insider
- Foursquare's new dashboard will give... | Business Insider
- Here's how Twitter explained its struggles after a sad earnings report (TWTR) | Business Insider