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
- Futures Poised For New Record Highs On Weekend Central Bank Double Whammy | ZeroHedge
- ISIS' First Administration Casualty: Chuck Hagel Resigns Under Pressure From Obama | ZeroHedge
- The Massively Crowded 'Long-USD, Short-Treasuries' Trade Just Got Crowded-er | ZeroHedge
- Scorching Demand For 5 Year Treasurys: Indirect Bid Highest On Record | ZeroHedge
- Apple Market Cap Tops $700 Billion, Netflix Goes Red In 2014 | ZeroHedge
- Deutsche Bank's Modest Proposal To Central Banks: "Purchase The Gold Held By Private Households" | ZeroHedge
- Twitter "Hedge Fund Manager" Anthony Davian Sentenced To 4 Years 9 Months In Federal Prison | ZeroHedge
The most relevant financial news and articles from the Internets
- '40 Detectives' Are Looking Into... | Business Insider
- This Is What Its Like To Live At The US's Most Remote Air Base | Business Insider
- The FAA's New Drone Proposal Would Be Bad News For Amazon And Google (GOOG, AMZN) | Business Insider
- Hughes in critical condition after hit by cricket ball | Business Insider
- Watch The Chilling Protests In Ferguson As Police Fire Tear Gas Into Crowds | Business Insider
- Robert Griffin III's Contract Situation Is Becoming A Problem For The Redskins | Business Insider
- A Secret Message Hidden In A CIA... | Business Insider