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
- BiG DouCHe SPoTTeD... | ZeroHedge
- Why We Feel So Poor (In Two Charts) | ZeroHedge
- The Death of Hope and Belief | ZeroHedge
- STTG Market Recap Mar 27, 2015 | FundMyMutualFund
- Crude Oil Inventories Should Peak Soon | Financial Sense
- Near-Term Dollar Conviction went MIA | ZeroHedge
- FeaTHeReD VaRMiNT... | ZeroHedge
The most relevant financial news and articles from the Internets
- 39 of the coolest startups founded by women | Business Insider
- Meet the 'pocket army' funded by... | Business Insider
- Gamers are spending thousands of dollars a year... | Business Insider
- Zarif confident 'all issues' in Iran talks can be... | Business Insider
- Singer Sam Smith lost 14 pounds in 14 days and now everyone is going nuts... | Business Insider
- Amazon looked completely different 10 years ago — here's what... | Business Insider
- Singapore honours Lee with grand state funeral | Business Insider