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
- The First Casualty Of Brexit: Italy Prepares €40 Billion Bank Bailout | ZeroHedge
- Brexit Leaves Markets in Upheaval | Financial Sense
- Why Is The U.S. Embracing Iran - Again!? | ZeroHedge
- Hillary's Lead Over Trump Is Either 1% Or 12% Depending On Which Poll You Believe | ZeroHedge
- US Services Economy Disappoints As 'Optimism' Plunges To Record Lows | ZeroHedge
- Will The Market Break? Keep An Eye On This For the Answer | ZeroHedge
- "Death To All Zombies!" | ZeroHedge
The most relevant financial news and articles from the Internets
- This VC who sold his last startup to Adobe just raised a... | Business Insider
- How to build real professional relationships with the people you... | Business Insider
- Lawmakers deadlock on agreeing funds to fight Zika virus | Business Insider
- 7 ways to stop over-thinking everything in your life | Business Insider
- Boston mob boss 'Whitey' Bulger's possessions... | Business Insider
- Here’s why the most popular map of the world is totally misleading... | Business Insider
- Kevin Love shared a funny anecdote about knowing he had... | Business Insider