Covered Call Picks (URI,LCC,GMCR,MU,STX)
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.
|URI||United Rentals Inc||34.8||35||2.4||6.80%||Jul-12|
|LCC||US Airways Group Inc||12.5||13||0.8||6.70%||Jul-12|
|GMCR||Green Mountain Coffee Roasters Inc||20.7||21||1.3||6.40%||Jul-12|
|MU||Micron Technology Inc||5.94||6||0.4||6.10%||Jul-12|
United Rentals Inc (URI) is currently trading at $34.79. Its 52 week range is between $12.81 and $47.98.
US Airways Group Inc (LCC) is currently trading at $12.5. Its 52 week range is between $3.96 and $13.36.
Green Mountain Coffee Roasters Inc (GMCR) is currently trading at $20.7. Its 52 week range is between $19.45 and $115.98.
Micron Technology Inc (MU) is currently trading at $5.94. Its 52 week range is $3.97 and $9.16.
Seagate Technology (STX) is currently trading at $23.84. Its 52 week range is between $9.05 and $32.55.
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
- Near-Term Dollar Outlook | ZeroHedge
- Donald Trump's Soaring Popularity "Is The Country's Collective Middle Finger To Washington" | ZeroHedge
- Gold Surges Back Above $1100 As Dollar Dumps After Wage Data | ZeroHedge
- Bernie, The Koch Brothers, & Open Borders | ZeroHedge
- Debt Slaves: 7 Out Of 10 Americans Believe That Debt "Is A Necessity In Their Lives" | ZeroHedge
- The Cyber Wars Begin: Obama Says US "Must Retaliate" Against China For Historic Data Breach | ZeroHedge
- Amoeba, Fish, Lizard, Ape, Human, Investor... Meet Evolutionary Economics | ZeroHedge
The most relevant financial news and articles from the Internets
- Laptop Computer Reviews - BusinessWeek | BusinessWeek
- Suze Orman, Debit-Card Dealer | BusinessWeek
- Cannes traders roll out red carpet to Saudi... | Business Insider
- 10 things you need to know before the opening bell (QQQ, DIA, SPY, SPX, AMGN, LNKD, AAPL, CCE... | Business Insider
- These groundbreaking prosthetics are so lifelike, they will make... | Business Insider
- The 10 most important things in the world right now | Business Insider
- Unusual 11 Mid-... | StreetInsider.com