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
- Initial Jobless Claims Spikes Above 300k To 3-Month Highs, Biggest Miss In 11 Months | ZeroHedge
- The American Dream Has Moved to Scandinavia | ZeroHedge
- WTI Crude Crashes Below $70 For First Time Since June 2010 | ZeroHedge
- US "Secret" Deal With Saudis Backfires After Oil Minister Says US Should Cut First | ZeroHedge
- Stocks Close At Recordest Highs Ensuring 'Confident' Black Friday, Despite Macro Massacre | ZeroHedge
- This Indicator Suggests Gold’s Bear Market Has a lot Longer to Go – But Is It Right? | Financial Sense
- Core Durable Orders Drop Most Since Polar Vortex, Core CapEx Lowest Since May | ZeroHedge
The most relevant financial news and articles from the Internets
- Palantir, the War on Terror's Secret Weapon | BusinessWeek
- Sheep flock to Eiffel Tower as French farmers cry wolf | Business Insider
- Here Are The UK's Best Black Friday Deals | Business Insider
- 19 Of The Most Expensive Substances In The World | Business Insider
- The 11 Most Underrated Ski Resorts In America | Business Insider
- Argentine President Emerges After Yet Another Illness And She Is Not Happy With... | Business Insider
- 4 Tricks To Making Thanksgiving Much Easier | Business Insider