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
- Leaking Las Vegas: Forced Rationing Looms As Lake Mead Faces Federal "Water Emergency" | ZeroHedge
- Hong Kong 'Loophole' May Have Flooded China With Radioactive Japanese Foods | ZeroHedge
- The Coming of Age of the Chinese Yuan | Financial Sense
- Four Key Catalysts To Watch In The Oil Sector | ZeroHedge
- ADP Jobs Report Backs Up Slowdown | Financial Sense
- Capital Controls Hit Greek Banks: FX Trading Curbed As Credit Lines Cut | ZeroHedge
- TPPA FaST TRaCK CLaSS WiTH UNCLe SOPA... | ZeroHedge
The most relevant financial news and articles from the Internets
- Mother of a 12-year-old shot by police says she's now... | Business Insider
- People who support controversial Common Core testing just... | Business Insider
- 9 stylish and work-appropriate watches for women that are... | Business Insider
- Market Wrap: Cisco Names... | StreetInsider.com
- LinkedIn wants its Mountain View headquarters to have a movie theater, NBA-... | Business Insider
- One research firm has a bold new call for Tesla shares (TSLA) | Business Insider
- These 10 companies control almost everything you wear | Business Insider