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
- Trump Asks Why Intelligence Committee Isn't Probing The Clintons | ZeroHedge
- SocGen Reveals The Best Trading Strategy Of The Year | ZeroHedge
- Partner At Paulson & Company Jumps To His Death In Midtown Manhattan | ZeroHedge
- Sanctioned Russian Bank Confirms It Met With Trump's Son-In-Law | ZeroHedge
- Mexican Archdiocese Blasts "Immoral" Companies Building Border Wall As "Traitors To Homeland" | ZeroHedge
- Stock Market Getting Ready for a BIG Move; Risk to the Downside | Financial Sense
- The Robots Win: Blackrock Bets On Computers Over Human Stock Pickers, Fires Dozens | ZeroHedge
The most relevant financial news and articles from the Internets
- YouTube’s advertiser boycott probably won’t dent Google’s empire | Business Insider
- George Soros' former right-hand man is selling his 20-acre estate for $31.5 million | Business Insider
- Police admit they don't know why Khalid Masood committed his terror... | Business Insider
- The 'Walking Dead' villain has a warped definition of rape in the zombie apocalypse... | Business Insider
- A former Google and Apple exec reveals what it's like... | Business Insider
- 5 books that will improve your communication skills | Business Insider
- Everything you need to know about the 'Twin Peaks' revival | Business Insider