Covered Call Picks (ARNA,CHK,SINA,HLF,SLW)
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.
|ARNA||Arena Pharmaceuticals Inc||5.92||6||2.2||36.80%||Jan-13|
|CHK||Chesapeake Energy Corp||14.9||15||3.6||24.10%||Jan-13|
|SLW||Silver Wheaton Corp||25.6||26||3.9||15.20%||Jan-13|
Arena Pharmaceuticals Inc (ARNA) is currently trading at $5.92. Its 52 week range is between $1.23 and $7.02.
Chesapeake Energy Corp (CHK) is currently trading at $14.91. Its 52 week range is between $13.32 and $35.75.
SINA Corp (SINA) is currently trading at $54.74. Its 52 week range is between $46.86 and $128.17.
Herbalife Ltd (HLF) is currently trading at $45.96. Its 52 week range is $42.15 and $73.
Silver Wheaton Corp (SLW) is currently trading at $25.62. Its 52 week range is between $22.94 and $42.5.
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
- Boris Johnson Emerges, Explains What "The Only Change" As A Result Of Brexit Will Be | ZeroHedge
- President Of The European Parliament: "It Is Not The EU Philosophy That The Crowd Can Decide Its Fate" | ZeroHedge
- Gun Salesman-In-Chief: 52,600 Weapons Sold Daily Under Obama Admin | ZeroHedge
- Why Did The UK Enter The EU In The First Place? | ZeroHedge
- The End Game Of Bubble Finance - Political Revolt | ZeroHedge
- US Stocks Erase All Post-QE3 Gains, Tumble To Fed Balance Sheet 'Reality' Once More | ZeroHedge
- UBS CIO Warns "The Status Quo Is Over... Get Used To It" | ZeroHedge
The most relevant financial news and articles from the Internets
- California police are investigating a violent clash... | Business Insider
- Brexit could threaten NATO at a critical time | Business Insider
- Here's the career advice President Obama gives... | Business Insider
- Google invented a new way to teach kids how to code using blocks | Business Insider
- Saab is officially dead | Business Insider
- Fans are trying to figure out what was whispered in this epic 'Game of... | Business Insider
- The 5 most talked-about moments from the 'Game of Thrones' season... | Business Insider