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
- The Biggest Threat To America | ZeroHedge
- Weekday Wrap-Up: Supercomputers, Corrections, and Converging Cycles | Financial Sense
- Oil Prices Continue to Define Geopolitics | Financial Sense
- 50% Of American Workers Make Less Than $28,031 A Year | ZeroHedge
- Weekend Top 100 | iBankCoin.com
- Speak, Switzerland! | Financial Sense
- Friday Humor: Windows 10 | ZeroHedge
The most relevant financial news and articles from the Internets
- I Just Tried Uber's New Delivery Service 'Rush' And It Got Me My Package In 20 Minutes... | Business Insider
- BARCLAYS: These 25 Stocks Are Ready To Bounce Back From The... | Business Insider
- Shooter opens fire at US school, kills self: report | Business Insider
- Luis Suarez starts for Barcelona in El Clasico | Business Insider
- 1 mn join Rome protest against Renzi job plan | Business Insider
- Markets Are Sinking | Business Insider
- The One App You Need On Your Résumé If You Want A Job At Google (GOOG... | Business Insider