Covered Call Picks (FSLR,VXX,WCRX,ANR,HNR)
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||14.9||15||1.2||7.70%||Jul-12|
|VXX||iPath S&P 500 VIX ST Futures ETN||16.7||17||1.3||7.50%||Jul-12|
|WCRX||Warner Chilcott PLC||17.7||18||1.2||6.50%||Jul-12|
|ANR||Alpha Natural Resources Inc||7.73||8||0.5||6.20%||Jul-12|
|HNR||Harvest Natural Resources Inc||8.95||10||0.4||3.90%||Jul-12|
First Solar Inc (FSLR) is currently trading at $14.89. Its 52 week range is between $11.43 and $142.22.
iPath S&P 500 VIX ST Futures ETN (VXX) is currently trading at $16.67. Its 52 week range is between $15.57 and $59.18.
Warner Chilcott PLC (WCRX) is currently trading at $17.69. Its 52 week range is between $12.9 and $24.65.
Alpha Natural Resources Inc (ANR) is currently trading at $7.73. Its 52 week range is $7.83 and $47.25.
Harvest Natural Resources Inc (HNR) is currently trading at $8.95. Its 52 week range is between $4.85 and $14.21.
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
- Potential for Deflation Is Becoming a Big Threat for 2015 | Financial Sense
- Shake Shak Opens For Trading Valued At 108x EBITDA | ZeroHedge
- Chicago PMI Beats But Remains Lower Year-Over-Year | ZeroHedge
- Weekend Top 100 | iBankCoin.com
- Did The Federal Reserve Make A Major Math Error When Reporting Its December Gold Withdrawals? | ZeroHedge
- Will Greece & Falling Oil Issues Stay “Contained”? – Investors on High Alert | Financial Sense
- The Mexican Peso & Brazilian Real Are Collapsing | ZeroHedge
The most relevant financial news and articles from the Internets
- Russia's economy to shrink by 3% in 2015: minister | Business Insider
- Kiev hopes for stalled truce talks despite separatist vow... | Business Insider
- Oil prices rocket by nearly $4 a barrel | Business Insider
- The unusual place this serial tech entrepreneur gets his best ideas | Business Insider
- 5 Big Stocks That Look Toxic in February: P&G, Johnson Controls and More | TheStreet.com
- Notable 52-Week... | StreetInsider.com
- Meet the carbon-fiber Rolls-Royce inspired by the stealth... | Business Insider