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
- China About to Miss the 7.5% GDP Growth Target | Financial Sense
- DEATH IS COMING | iBankCoin.com
- A Heatmap Of Global CapEx In An Ex-CapEx World | ZeroHedge
- Small Town Throwdown: Morning Version | iBankCoin.com
- August Retail Sales Rose Broadly | Financial Sense
- 47% of Chinese Billionaires Want to Leave China Within 5 Years | Financial Sense
- Strong Dollar Undermines Precious Metals | Financial Sense
The most relevant financial news and articles from the Internets
- New York Congressman Says ISIS 'Won't Be Afraid To Put A... | Business Insider
- CHART OF THE DAY: Netflix's Brilliant... | Business Insider
- Suze Orman, Debit-Card Dealer | BusinessWeek
- Alibaba Flotation Gives Yahoo An Opportunity To Turn... | Business Insider
- Emerging Payment Technologies Will Create New Winners And Losers In The Massive... | Business Insider
- Tesla Got Obliterated (TSLA) | Business Insider
- Industrial Production Unexpectedly Falls In August (DIA, SPY, QQQ, TLT) | Business Insider