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
- Clinton Adviser, Nobel Prize Winning Economist Endorsed Venezuelan Socialism | ZeroHedge
- Market Recap May 24, 2016 | FundMyMutualFund
- US Spy Plane Disrupts Civilian Flights While Spying On Russia | ZeroHedge
- Global Stocks, Futures Rally, Ignore Sharp Yuan Devaluation On Hopes Fed Is Right This Time | ZeroHedge
- "Someday We'll Be Microchipping All Of Our Children" | ZeroHedge
- End of Debt Supercycle Means Low Rates for Years to Come | Financial Sense
- In Today's Layoff News: Microsoft Fires 1,850; Intel Cuts 350; Shell Terminating 2,200 | ZeroHedge
The most relevant financial news and articles from the Internets
- 10 insanely fun outdoor games to play this summer | Business Insider
- Apple is hiring a lawyer who specializes in medical privacy, hinting at bigger health tech... | Business Insider
- An exercise scientist has a plan to finally conquer the 2-... | Business Insider
- BANK OF CANADA: The 'devastating' Alberta wildfires will have a big... | Business Insider
- How comedian Hannibal Buress' life changed after he told... | Business Insider
- SpaceX is about to attempt another extremely difficult landing | Business Insider
- HERE IT IS: One brutal chart shows death is imminent for America's... | Business Insider