Covered Call Picks (FSLR,SQNM,NFLX,GRPN,AMLN)
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.
|FSLR||First Solar Inc||22||23||1.9||8.50%||May-12|
|AMLN||Amylin Pharmaceuticals Inc||24.3||25||1.6||6.50%||May-12|
First Solar Inc (FSLR) is currently trading at $22. Its 52 week range is between $20.02 and $147.2.
Sequenom Inc (SQNM) is currently trading at $3.93. Its 52 week range is between $3.52 and $8.71.
Netflix Inc (NFLX) is currently trading at $104.26. Its 52 week range is between $62.37 and $304.79.
Groupon Inc (GRPN) is currently trading at $13.56. Its 52 week range is $12.95 and $31.14.
Amylin Pharmaceuticals Inc (AMLN) is currently trading at $24.28. Its 52 week range is between $8.03 and $25.84.
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
- Can Trumponomics Fix What's Broken? | ZeroHedge
- What Happens Next? | ZeroHedge
- OPEC Oil Production Hits New All Time High As Brent Surges To 16 Month High | ZeroHedge
- In Tweetstorm, Trump Threatens "Retribution" For Companies That Leave The US | ZeroHedge
- As Dakota Celebrates, Trump Advisors Propose Privatizing Oil-Rich Indian Reservations | ZeroHedge
- Meet the 2017 FOMC | Financial Sense
- Italian Bank Warns 30 Times For A Bail-In If The NO Camp Wins The Referendum | ZeroHedge
The most relevant financial news and articles from the Internets
- REPORTS: French PM Manuel Valls to run for president | Business Insider
- Apple is urging the US government to speed up self-... | Business Insider
- 23 years ago Pablo Escobar was gunned down in his hometown,... | Business Insider
- 29 annoying words and phrases on your résumé that make hiring... | Business Insider
- Mistrial declared in murder trial of South... | Business Insider
- A lot of new cars have an innovative, high-tech transmission —... | Business Insider
- 20 photos that give us our first look at the next 'Transformers' movie | Business Insider