Covered Call Picks (ZNGA,VHC,NFLX,CRUS,RVBD)
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.
|VHC||VirnetX Holding Corp||35.3||36||3||8.50%||Aug-12|
|CRUS||Cirrus Logic Inc||27.6||28||2.1||7.60%||Aug-12|
|RVBD||Riverbed Technology Inc||15.3||16||1.1||7.30%||Aug-12|
Zynga Inc (ZNGA) is currently trading at $4.8. Its 52 week range is between $4.45 and $15.91.
VirnetX Holding Corp (VHC) is currently trading at $35.25. Its 52 week range is between $11.01 and $41.93.
Netflix Inc (NFLX) is currently trading at $81.82. Its 52 week range is between $60.7 and $285.5.
Cirrus Logic Inc (CRUS) is currently trading at $27.6. Its 52 week range is $12.52 and $31.23.
Riverbed Technology Inc (RVBD) is currently trading at $15.29. Its 52 week range is between $13.3 and $32.67.
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
- "Sell The Inauguration" - Dow & Dollar Drop As Bonds & Bullion Pop | ZeroHedge
- Trump Wins The Unions: Teamsters Praise TPP Withdrawal, Labor Chiefs Describe "Incredible" Meeting With Trump | ZeroHedge
- "We Are Two Nations... Maybe More!" | ZeroHedge
- The Last Time Oil Speculators Were This 'Long', Crude Collapsed | ZeroHedge
- Trump May "Stop Enforcing Obamacare's Individual Mandate" | ZeroHedge
- Fakewood EXPOSED: Where Fake News began | ZeroHedge
- Politicians Across America Continue Push To Make Protesting Illegal | ZeroHedge
The most relevant financial news and articles from the Internets
- HBO's 'The Young Pope' is inspiring lots of hilarious... | Business Insider
- Tom Brady expresses confusion over phone calls with Trump: 'Why does that make... | Business Insider
- 'We're not going to sit around and take it... | Business Insider
- 'Trump-curious' voters will decide the fate of his presidency | Business Insider
- Trump: Phone call with Israel's Netanyahu was 'very... | Business Insider
- Tom Brady is the most successful quarterback in NFL history | Business Insider
- 7 signs your relationship is failing — even if it doesn't feel like it | Business Insider