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
- Daily Scorecard | iBankCoin.com
- 2,200 National Guard Troops To Be Deployed In Ferguson Tonight, Up From 700 | ZeroHedge
- Ukraine Central Bank Admits Gold Outflow, Calls It "Optimization Of Reserve Structure" | ZeroHedge
- STTG Market Recap November 24, 2014 | FundMyMutualFund
- Hacked US Documents Said To Reveal Extent Of Undisclosed US "Lethal Aid" For Ukraine Army | ZeroHedge
- The Mystery Of America's "Schrodinger" Middle Class, Which Is Either Thriving Or About To Go Extinct | ZeroHedge
- Why Millennials Still Live at Home (It Isn’t Jobs, Student Debt, or Housing) | Financial Sense
The most relevant financial news and articles from the Internets
- KRUGMAN: 'Angry Billionaires' Like Paul Singer Are Just Wrong... | Business Insider
- 25 Ways to Make LinkedIn Work for You | BusinessWeek
- How Microsoft Can Bring in an Extra $3 Billion by Catering Towards Small Businesses | TheStreet.com
- Google Nexus Player Review: Google's TV Streaming Answer to Amazon, Apple and Roku | TheStreet.com
- Samsung sells defence, petrochemical units for $1.7 bn | Business Insider
- A Stealth E-Commerce Startup Is Offering People Who Aren't... | Business Insider
- 10 Things You Need To Know Today In Markets | Business Insider