Covered Call Picks (FB,CHK,LVS,USO,C)
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.
|CHK||Chesapeake Energy Corp||18.2||19||1.3||7.10%||Sep-12|
|LVS||Las Vegas Sands Corp||36.4||37||1.9||5.20%||Sep-12|
|USO||United States Oil||33.4||33.5||1.6||4.90%||Sep-12|
Facebook Inc (FB) is currently trading at $26.85. Its 52 week range is between $25.52 and $45.
Chesapeake Energy Corp (CHK) is currently trading at $18.15. Its 52 week range is between $13.32 and $35.75.
Las Vegas Sands Corp (LVS) is currently trading at $36.41. Its 52 week range is between $36.08 and $62.09.
United States Oil (USO) is currently trading at $33.41. Its 52 week range is $29.02 and $42.3.
Citigroup Inc (C) is currently trading at $26.28. Its 52 week range is between $21.4 and $39.42.
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
- June Payrolls Increase By 223K, Less Than Expected; Unemployment Rate Drops To 5.3% | ZeroHedge
- Factory Orders Scream Recession: Annual Drop Biggest Since 2008 | ZeroHedge
- "Heartbreaking" Scene Unfolds At Greek Banks As Pensioners Clamor For Cash | ZeroHedge
- Greek Banks To Run Out Of Physical Cash "In A Matter Of Days" | ZeroHedge
- Church Elder Defrauds Investors With "Holy Spirit" Day Trading System | ZeroHedge
- China State Official Hints Beijing May Bailout Greece | ZeroHedge
- Now’s Really Not the Time for a Liquidity Crisis | Financial Sense
The most relevant financial news and articles from the Internets
- They finally figured out what to do with old dairy cows | Business Insider
- Djokovic, Serena, Sharapova eye Wimbledon last 16 | Business Insider
- Homophobia is bad for the economy | Business Insider
- Notable Mergers and Acquisitions 7/2: (... | StreetInsider.com
- I got a rare reaction to a routine shot — but I... | Business Insider
- White still not right at Wimbledon | Business Insider
- US asks Swiss to extradite 7 FIFA officials: government | Business Insider