Covered Call Picks (FIO,SODA,FMCN,LEAP,KORS)
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.
Fusion-io Inc (FIO) is currently trading at $19.49. Its 52 week range is between $14.9 and $41.74.
Sodastream International Ltd (SODA) is currently trading at $40.57. Its 52 week range is between $27.6 and $73.44.
Focus Media Holding Ltd (FMCN) is currently trading at $19.83. Its 52 week range is between $8.79 and $32.93.
Leap Wireless International Inc (LEAP) is currently trading at $5.22. Its 52 week range is $4.68 and $11.3.
Michael Kors Holdings Ltd (KORS) is currently trading at $41.19. Its 52 week range is between $23.51 and $50.69.
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
- Guest Post: Why Impeachment Is Necessary | ZeroHedge
- High-Yield Credit Hits 10-Week Wides As Stocks Bounceback To Unch | ZeroHedge
- An Interesting Spread | iBankCoin.com
- THe SCHLoCK HeaRD RouND THe WoRLD... | ZeroHedge
- A Long-Term Look at Inflation | Financial Sense
- Avi Gilburt: Gold Could Break Below $1000; Sees Sharp Decline in Stocks Before Final Top | Financial Sense
- China’s Market Finally Looks Like a Buy | Financial Sense
The most relevant financial news and articles from the Internets
- The US Economy Does Better Under Democratic Presidents, But Party Affiliation Has Nothing To... | Business Insider
- Intense Photos Show Aftermath Of Rare New England Tornado | Business Insider
- Twitter's Stock Is Going Bonkers This Morning (TWTR) | Business Insider
- 12 Bizarre Things Wall Streeters Do To Be Better Traders | Business Insider
- Trading Suspended On Moscow Stock Exchange | Business Insider
- 10 Cool Games You Can Play On Your Mac | Business Insider
- TED CRUZ CHANNELS REAGAN: 'Mr. Putin, Give Back Crimea' | Business Insider