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
- Pound Tumbles On Report Scotland May Hold Second Independence Referendum | ZeroHedge
- Trump Is Right: "Swedes Are Suppressed By A Religious-Cult-Like Political Correctness" | ZeroHedge
- Nexit Looms - Dutch Parliament To Debate Leaving The Eurozone | ZeroHedge
- Estate Planning for Asset Protection | Financial Sense
- Ben Stein Unloads on Media, Calls Them 'Unelected Aristocracy, an Effete Corps of Impudent Snobs' | ZeroHedge
- N. Korean Nukes Exaggerated; More Questions About American Nukes Too | ZeroHedge
- Instant Tax Collection: As Bitcoin Surges to Record High, China Prepares its Own Digital Currency | Financial Sense
The most relevant financial news and articles from the Internets
- YouTube stars are resisting Trump at the risk of... | Business Insider
- Warren Buffett's racked up a $1.6 billion gain in his... | Business Insider
- Former Navy special operations commander: Trump attacks on media... | Business Insider
- Baltimore Ravens' Matt Elam arrested on multiple... | Business Insider
- These hybrid yachts are perfect for the eco-friendly traveler | Business Insider
- Here's who would lose money under Trump's proposed tax plan | Business Insider
- The 13 most awkward moments in Oscar history | Business Insider