Covered Call Picks (AMRN,VQ,ALXA,GRPN,VHC)
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.
|AMRN||Amarin Corporation PLC||14.9||15||2.8||18.80%||Aug-12|
|ALXA||Alexza Pharmaceuticals Inc||3.86||4||0.5||11.70%||Aug-12|
|VHC||VirnetX Holding Corp||40.4||41||3.9||9.70%||Aug-12|
Amarin Corporation PLC (AMRN) is currently trading at $14.92. Its 52 week range is between $5.99 and $15.6.
Venoco Inc (VQ) is currently trading at $9.5. Its 52 week range is between $6.5 and $14.94.
Alexza Pharmaceuticals Inc (ALXA) is currently trading at $3.86. Its 52 week range is between $2.55 and $18.4.
Groupon Inc (GRPN) is currently trading at $7.67. Its 52 week range is $7.25 and $31.14.
VirnetX Holding Corp (VHC) is currently trading at $40.4. Its 52 week range is between $11.01 and $41.77.
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
- Will Investors Get Out In Time This Time? | Financial Sense
- Facebook a Standout Even Among the Leaders | iBankCoin.com
- New Long | iBankCoin.com
- Europe Unleashes Sanctions On 15 Individuals And 18 Entities (But No Russian Companies) | ZeroHedge
- CEO Of Russia's 2nd Largest Gold Producer Is "Horrified" At Market Manipulation | ZeroHedge
- Where China Goes To Outsource Its Own Soaring Labor Costs | ZeroHedge
- ‘Apocalypse’ Krugman Ignores History, Keynes And Lenin’s Warnings | ZeroHedge
The most relevant financial news and articles from the Internets
- 17 Things Successful People Never Say | Business Insider
- Here's Everything You Need To Know About 'Generation Alpha' — The Age Group Beyond Gen Z... | Business Insider
- Google Is Offering Three Months Of Free Unlimited Music To Celebrate... | Business Insider
- America's Best Young Entrepreneurs 2011 | BusinessWeek
- Tour de France Leader Nearly Taken Down By... | Business Insider
- 25 Ways to Make LinkedIn Work for You | BusinessWeek
- 11 Power Words That Will Make Any Resume Stand Out | Business Insider