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
- Latest Titanic Readings in Case of Iceberg | iBankCoin.com
- Who's Right? | ZeroHedge
- Speak, Switzerland! | Financial Sense
- Potential Intraday Runners | iBankCoin.com
- Meet Janet Dupree:72, Alcoholic, HIV-Positive, $16,000 In Student Debt: "I Won't Live Long Enough To Pay It Off" | ZeroHedge
- Central Banker Admits Central Bank Policy Leads To Wealth Inequality | ZeroHedge
- Van Hoisington And The Fed's Bubble: "Overtrading" And "Discredit" Always End In "Revulsion" | ZeroHedge
The most relevant financial news and articles from the Internets
- Markets Are Sinking | Business Insider
- Market Wrap: CPI Outpaces in Sept.;... | StreetInsider.com
- Microsoft Cloud Was A Ray Of Sunshine This Quarter With Revenue Up 128% (MSFT) | Business Insider
- A New Study Shows That Sunday Is The Best Day To Book A Flight | Business Insider
- The Milwaukee Bucks Fooled An Entire Defense With A Fake Timeout And Got An... | Business Insider
- Here's How To Actually Stick To An Exercise Plan, According To A Famous... | Business Insider
- These Charts Show Just How Far The Newspaper Industry Has Fallen In 10 Years... | Business Insider