Covered Call Picks (NOK,NAV,S,CRM,SLW)
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.
Nokia ADR representing one Ord Shs Series A (NOK) is currently trading at $3.25. Its 52 week range is between $1.63 and $7.38.
Navistar International Corp (NAV) is currently trading at $23.32. Its 52 week range is between $20.07 and $48.18.
Sprint Nextel Corp (S) is currently trading at $4.82. Its 52 week range is between $2.1 and $5.49.
Salesforce.com Inc (CRM) is currently trading at $149.06. Its 52 week range is $94.09 and $164.75.
Silver Wheaton Corp (SLW) is currently trading at $33.78. Its 52 week range is between $22.94 and $42.5.
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
- Night Owl Open Forum | iBankCoin.com
- Is This the Beginning of a New Bear Market? Important Signs to Watch | Financial Sense
- Weekday Wrap-Up: Supercomputers, Corrections, and Converging Cycles | Financial Sense
- Speak, Switzerland! | Financial Sense
- Equity Levitation Stumbles After Second ECB Denial Of Corporate Bond Buying, Report Of 11 Stress Test Failures | ZeroHedge
- Russia Deploys Troops, Robots Along Entire "2nd Middle East" Arctic Belt | ZeroHedge
- What Happens When Cash Is No Longer Trash? | ZeroHedge
The most relevant financial news and articles from the Internets
- This Scientist Opened A New Era In Astronomy | Business Insider
- Russia takes bite out of McDonald's with US... | Business Insider
- REPORTS: There's An Active Shooter Near Canadian Parliament | Business Insider
- How To Calculate The Tip In Under 30 Seconds | Business Insider
- How We Paid Off Over $20,000 Of Credit Card Debt In 14 Months | Business Insider
- UNC Athletics Department Staff Members Used This Insane Slide To Defend Fake... | Business Insider
- Thaw reveals Antarctic explorer's century-old notebook... | Business Insider