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
- Banks, Bonds, & Bullion Bid As Healthcare Hope Trumps Terror Attack Turmoil | ZeroHedge
- Maxine Waters Tweets: "GET READY FOR IMPEACHMENT" | ZeroHedge
- Banks Stocks could underperform for years (Update) | ZeroHedge
- Economics Of The Standoff Between Turkey And The Netherlands | ZeroHedge
- Brexit Takes Fresh Toll on Sterling, While Dollar Firms | Financial Sense
- Perfect Example Of Why Job Losses From Minimum-Wage-Hikes Are Being Underestimated, 'Bigly' | ZeroHedge
- Nunes Confirms There Was "Incidental Surveillance" Of Trump During Obama Administration, "Seems To Be Inappropriate" | ZeroHedge
The most relevant financial news and articles from the Internets
- Target is fixing the most annoying part of shopping there (TGT... | Business Insider
- Check out the private French Polynesian island Obama is about to... | Business Insider
- Gorsuch: Trump believed he could've won Colorado with more time | Business Insider
- A reporter asked Spicer if he’s confident that no one in the White... | Business Insider
- Trumpcare is causing Wall Street to question Trump... | Business Insider
- THE APP ENGAGEMENT REPORT: The tools and tactics brands, marketers, and app makers can use to keep users... | Business Insider
- Seth Meyers: Hillary Clinton is ready for 'Game of Thrones... | Business Insider