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
- Davidowitz: Retailers in 'Survival Mode' as Headwinds Multiply | Financial Sense
- Warning Signs Everywhere | ZeroHedge
- CNN Lashes Out At Trump Over Vince Foster "Conspiracy", Rushes To Hillary's Defense | ZeroHedge
- Eurogroup Agrees To Disburse €7.5BN To Greece Which Will Be Used To Repay Creditors | ZeroHedge
- Trump Goes For Hillary's Jugular: Releases Video Featuring Bill Clinton Rape Accusers | ZeroHedge
- Are Investors Idiots? | ZeroHedge
- Will The Fed Hike In June? It's All In The Hands Of China Now, Deutsche Bank Explains | ZeroHedge
The most relevant financial news and articles from the Internets
- A bunch of new startups are trying to make it cheaper and... | Business Insider
- Why I don't let my kids play The Game of Life | Business Insider
- US-backed Syrian... | Business Insider
- Messaging apps are now bigger than social networks | Business Insider
- Microsoft's mobile surrender (MSFT) | Business Insider
- Here's how the big battle from Sunday's 'Game of Thrones' looks... | Business Insider
- I spent... | Business Insider