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
- One More Casualty Of The 9/11 Farce - The Petrodollar | ZeroHedge
- What $499,000 Buys You In Brooklyn: A 20-by-97 Foot Lot With A "House" | ZeroHedge
- Delaware Has One Billion Reasons Not To Change Its Laws Of Incorporation | ZeroHedge
- Suspect Dressed In Panda Suit Shot After Entering Fox Baltimore Studio And Claiming To Have A Bomb | ZeroHedge
- China "Wealth Manager" Disappears With $154 Million | ZeroHedge
- Frontrunning: April 27 | ZeroHedge
- Is The Race Over: Market Odds Of Contested Convention Tumble As Trump Nomination Odds Surge | ZeroHedge
The most relevant financial news and articles from the Internets
- A map of the world's currencies, and how they... | Business Insider
- NBC's Olympic ad strategy heralds new industry trends | Business Insider
- Peru enacted a dangerous law to fight drug smuggling, but... | Business Insider
- Remitly scores its largest funding round | Business Insider
- The US economy was weaker than expected in the first quarter | Business Insider
- The new 'Captain America' movie is already No. 1 at the box... | Business Insider
- Here's how marketers are using different mobile... | Business Insider