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
- KaleBios 'Black Friday' Begins As Shrekli Forces 65% Short-Squeeze Surge In Pre-Market | ZeroHedge
- He Lived Through Hyperinflation, Devaluation And Confiscation: This Is His Advice | ZeroHedge
- Caught On Tape: China Builds A Bridge In Just 43 Hours | ZeroHedge
- Is it Time to Get Defensive? | Financial Sense
- Submerging Markets | ZeroHedge
- Do Not Panic America - Elite FBI Teams Are Tracking At least 48 "High Risk" ISIS Suspects In The US | ZeroHedge
- Haidt-Speak - Coddling, Cry-Bullies, & Ending The Micro-aggression Culture | ZeroHedge
The most relevant financial news and articles from the Internets
- Tunisia identifies suicide bomber as local street vendor | Business Insider
- Obama eyes chance to make mark, at last, on climate change... | Business Insider
- Chicago man, 27, charged in fatal shooting of 9-year-old | Business Insider
- Fury slightly heavier than Klitschko ahead of bout | Business Insider
- Some questions, answers about Minneapolis police shooting... | Business Insider
- Shooting at US family planning center, several wounded... | Business Insider
- These 15 sci-fi books actually predicted the future | Business Insider