Covered Call Picks (FSLR,URI,MS,GRPN,SPPI)
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||15||15||1.7||11.00%||Jul-12|
|URI||United Rentals Inc||32.3||33||2.6||8.00%||Jul-12|
|SPPI||Spectrum Pharmaceuticals Inc||11.7||12||0.8||6.40%||Jul-12|
First Solar Inc (FSLR) is currently trading at $14.95. Its 52 week range is between $11.43 and $142.22.
United Rentals Inc (URI) is currently trading at $32.3. Its 52 week range is between $12.81 and $47.98.
Morgan Stanley (MS) is currently trading at $13.93. Its 52 week range is between $11.58 and $24.46.
Groupon Inc (GRPN) is currently trading at $9.95. Its 52 week range is $8.8 and $31.14.
Spectrum Pharmaceuticals Inc (SPPI) is currently trading at $11.72. Its 52 week range is between $6.94 and $16.
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
- NATO Threatens To Send In Troops After Russia Stations Ground "Battalion" In Syria | ZeroHedge
- Gold Jumps To 3-Week Highs On Heavy Volume | ZeroHedge
- NIRP, Its Likelihood and Effect on Commodities | Financial Sense
- The 'Real' Minimum Wage Exposed: Urban Outfitters Asks Staff To Work Weekends For Free | ZeroHedge
- The Real Reason For The Refugee Crisis You Won't Hear About In The Media | ZeroHedge
- Canada and the Oil Price Shock | Financial Sense
- "I'm Not Here To Beg You To Open Your F##king Eyes" | ZeroHedge
The most relevant financial news and articles from the Internets
- 90% of Russian airstrikes have not targeted ISIS | Business Insider
- Mickelson uses wrong ball, US penalized 2 holes | Business Insider
- 'The Walking Dead' hosts huge premiere for fans... | Business Insider
- Kershaw, Dodgers facing different Mets in playoffs | Business Insider
- Al Franken working on book about his years in Washington | Business Insider
- A paralyzed man walked again using a new... | Business Insider
- The best bakery in every state | Business Insider