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
- Swiss Franc Slumps Most Since September 2011 | ZeroHedge
- The Fed - Lucky or Smart? | Financial Sense
- Chart Of The Day: Souring "Mother's Milk" Edition | ZeroHedge
- "Unambiguously Good"? Dallas Fed Collapses To 20-Month Lows As Orders Plunge | ZeroHedge
- Blowout Victory For Syriza In Greek Elections: Live Webcasts | ZeroHedge
- Larry Summers Warns on Fed Rate Hikes | Financial Sense
- 2 Foot "Quad-Copter" Crashed On White House Grounds | ZeroHedge
The most relevant financial news and articles from the Internets
- An Analyst Says Everybody... | Business Insider
- Fascinating New Theory Explains How The Patriots Could Have Manipulated The... | Business Insider
- ... | StreetInsider.com
- Premier League trio avoid fresh FA Cup shocks | Business Insider
- Sharapova all business to set up Bouchard showdown | Business Insider
- 32 Jaw-Dropping Photos From the 2015 Dakar Rally | Business Insider
- IS confirms execution of Japanese hostage Haruna Yukawa | Business Insider