Covered Call Picks (VHC,OCZ,VQ,NAV,WLT)
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.
VirnetX Holding Corp (VHC) is currently trading at $23.66. Its 52 week range is between $11.01 and $41.93.
OCZ Technology Group Inc (OCZ) is currently trading at $6.27. Its 52 week range is between $4.14 and $10.05.
Venoco Inc (VQ) is currently trading at $9.27. Its 52 week range is between $6.5 and $13.
Navistar International Corp (NAV) is currently trading at $24.6. Its 52 week range is $20.21 and $52.36.
Walter Energy Inc (WLT) is currently trading at $34.3. Its 52 week range is between $31.33 and $126.
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
- The $555 Trillion Derivatives Debt Implosion Is About to Begin | ZeroHedge
- Friday Humor: What Comes After Brexit | ZeroHedge
- The US Government Will Spend $1.25 Million To Develop A Propaganda Cartoon For Pakistan | ZeroHedge
- Brexit Leaves Markets in Upheaval | Financial Sense
- W-I-L-D! | ZeroHedge
- Why China Is Arming Its Fishing Fleet | Financial Sense
- Charts: MASSIVE Speculative Bets on Gold - Bremain Vote Could Lead to Major Selloff | Financial Sense
The most relevant financial news and articles from the Internets
- Wall Street changed its China story again | Business Insider
- The DNA in your body stretches 12 times farther than Pluto | Business Insider
- Here's what magic mushrooms do to your body and mind | Business Insider
- Apple has a smart way to grow a new generation of fans: encouraging teen... | Business Insider
- The anti-Trump conservatives are getting ready to... | Business Insider
- THE... | Business Insider
- 5 apps to help you get your finances in check | Business Insider