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
- Facebook Launches 'Fake News' Filtering Service Ahead Of German Elections | ZeroHedge
- The Eight Forces That Are Pressuring Profits | Financial Sense
- Making Taxes Great Again - Trump vs. GOP Proposals | Financial Sense
- Watch Live: Theresa May's Brexit Speech; Says Will Put Final Brexit Deal To Vote In Parliament | ZeroHedge
- Liberal Logic - We are the Frog | ZeroHedge
- Rally in Oil Continues on Global Cues, Saudi Cut | Financial Sense
- Howard Marks: "So Much For The Experts" | ZeroHedge
The most relevant financial news and articles from the Internets
- 11 interview questions from bosses like Elon Musk and Larry Ellison that... | Business Insider
- Why LinkedIn's head of recruiting asks every job... | Business Insider
- An anonymous buyer purchased this $86 million mansion and will reportedly pay no... | Business Insider
- TRUMP ADVISER SCARAMUCCI: I just sold my company | Business Insider
- 9 parents reveal the money habits they refuse to pass on to... | Business Insider
- Rolls-Royce is paying £671 million to settle bribery probes in... | Business Insider
- We tried the potato chips that prisoners are obsessed with... | Business Insider