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
- Preet Bharara Joins NYU School Of Law | ZeroHedge
- BOMBSHELL: CIA Whistleblower Leaked Proof Trump Under "Systematic Illegal" Surveillance Over Two Years Ago: FBI Sat On It | ZeroHedge
- Five People Killed, At Least 40 Injured After Terrorist In SUV "Mows Down" Pedestrians In London | ZeroHedge
- Doug Casey Has "Never Seen Anything Like This" | ZeroHedge
- Markets Priced for Perfection, Sentiment Ahead of Actual Growth | Financial Sense
- Davos For Democrats: DNC Mega Donors Meet At Mandarin Oriental Hotel To Plot "The Resistance" | ZeroHedge
- US Bans Laptops, iPads, 'Anything Bigger Than A Cellphone' On Flights From 8 'Majority-Muslim' Countries | ZeroHedge
The most relevant financial news and articles from the Internets
- GE Healthcare is planning to add 5,000 software engineers (GE... | Business Insider
- Trumpcare is causing Wall Street to question Trump... | Business Insider
- How to tip in 25 different countries | Business Insider
- Here's where NYC's real estate players ranked on Forbes... | Business Insider
- A new breed of trader is threatening the Wall Street establishment | Business Insider
- 15 expensive steakhouses that are actually worth the price | Business Insider
- The mystery of a runaway star traveling 130,000 mph has finally been solved | Business Insider