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
- "Gold Is A Good Place To Put Money These Days" - Greenspan | ZeroHedge
- Today’s Movers | iBankCoin.com
- Oil Breaks Below $80 | Financial Sense
- OIL COUNTRY | iBankCoin.com
- Fireworks Fly As Peter Schiff Warns "An Economy That Lives By QE, Dies By QE" | ZeroHedge
- Gold Prices to 1-Week Low as Safe Haven Demand Falls | Financial Sense
- Silver, Copper Slammed As Commodities Crumble Into US Open | ZeroHedge
The most relevant financial news and articles from the Internets
- Russia offers US space station help after rocket explodes... | Business Insider
- Charles Barkley Explains How Michael Jordan... | Business Insider
- NOPE: People Are Getting Rejected Hundreds Of Millions Of Times On Tinder Every Day | Business Insider
- Bain Sends Its Interns To A Cape Cod Mansion Every Summer — Here... | Business Insider
- 3 Biggest Takeaways from Facebook's Third-Quarter Earnings Report | TheStreet.com
- Barclays bank takes £500m charge against forex probes | Business Insider
- U.S. Kids Using Media Almost 8 Hours a Day - BusinessWeek | BusinessWeek