Energy Covered Call Picks (KOG,MMR,ANR,BTU,CHK)
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.
Kodiak Oil & Gas Corp (KOG) is currently trading at $8.87. Its 52 week range is between $3.59 and $10.9.
McMoRan Exploration Co (MMR) is currently trading at $13.16. Its 52 week range is between $7.76 and $16.57.
Alpha Natural Resources Inc (ANR) is currently trading at $7.12. Its 52 week range is between $5.75 and $35.15.
Peabody Energy Corp (BTU) is currently trading at $22.96. Its 52 week range is $18.78 and $50.24.
Chesapeake Energy Corp (CHK) is currently trading at $19.06. Its 52 week range is between $13.32 and $33.87.
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
- What Happens If The Government Shuts Down | ZeroHedge
- NASDAQ Rises Above 6,000 For The First Time Ever | ZeroHedge
- Is the US Stock Market at a Major Inflection Point? | Financial Sense
- US Military Begins Moving THAAD Anti-Missile System Into South Korea Deployment Site | ZeroHedge
- G. Edward Griffin: Exposing The Creature From Jekyll Island | ZeroHedge
- Wayfair Tumbles After Amazon Launches Furniture Seller Program | ZeroHedge
- Chinese Stocks, Bonds, Commodities Shun Global Euphoria Amid Government Leverage Crackdown | ZeroHedge
The most relevant financial news and articles from the Internets
- 'We will not stand for this': Trump fires latest shot in escalating fight... | Business Insider
- Trump told an interviewer he didn't watch CNN minutes... | Business Insider
- U.S. Kids Using Media Almost 8 Hours a Day - BusinessWeek | BusinessWeek
- CHATBOTS EXPLAINED: Why... | Business Insider
- 'The game is rigged': Elizabeth Warren... | Business Insider
- THE OPEN BANKING REPORT: How banks can leverage open APIs and maintain their retail banking... | Business Insider
- What we know so far about the Larry Page-backed 'flying... | Business Insider