Covered Call Picks (NOK,WFR,NAV,ARNA,FB)
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.
|NOK||Nokia ADR representing one Ord Shs Series A||2.75||3||0.3||9.50%||October|
|WFR||MEMC Electronic Materials Inc||2.77||3||0.3||9.40%||October|
|NAV||Navistar International Corp||25||26||2.3||9.00%||October|
|ARNA||Arena Pharmaceuticals Inc||8.03||9||0.6||7.20%||October|
Nokia ADR representing one Ord Shs Series A (NOK) is currently trading at $2.75. Its 52 week range is between $1.63 and $7.38.
MEMC Electronic Materials Inc (WFR) is currently trading at $2.77. Its 52 week range is between $1.44 and $7.26.
Navistar International Corp (NAV) is currently trading at $25.04. Its 52 week range is between $20.07 and $48.18.
Arena Pharmaceuticals Inc (ARNA) is currently trading at $8.03. Its 52 week range is $1.23 and $13.5.
Facebook Inc (FB) is currently trading at $20.01. Its 52 week range is between $19 and $45.
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
- This Is What Happens When The 'Unrigged' Market Breaks | ZeroHedge
- Gold - Watch the €1000 Level | Financial Sense
- Stocks Go Vertical, Just Because | ZeroHedge
- LISTEN TO ME NOW: IT’S APRIL ALL OVER AGAIN | iBankCoin.com
- Is This China's Scariest Chart? | ZeroHedge
- Asia-Pac Stocks Head For Worst Losing Streak In 12 Years | ZeroHedge
- Inflation Watch: How Much $1 Used To Get You! | ZeroHedge
The most relevant financial news and articles from the Internets
- Here's Why ‘Guardians Of The Galaxy’ Director... | Business Insider
- Watch A Bunch Of Professors Read Mean Reviews From Their Students | Business Insider
- Hull and Hammers share four goals | Business Insider
- Robert Griffin III Suffers Another Devastating Leg Injury | Business Insider
- Oscar Pistorius Will Be Allowed To Compete In The Paralympics After... | Business Insider
- Here's How Stocks Performed During Past Dollar Bull And Bear... | Business Insider
- The Man Who Steve Jobs Considered For Apple’s CEO Is Back With A Startup That Lights... | Business Insider