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
- Why Perry Capital Shut Down: The Full Letter | ZeroHedge
- Robots Will Soon Take Over Building London Skyscrapers Says CEO of Large UK Construction Firm | Financial Sense
- Conference Board Leading Economic Index Declined in August, Disappoints Expectations | Financial Sense
- Consumer Confidence Highest Since Recession | Financial Sense
- John Kerry Gives Russia An Ultimatum: Stop Bombing Aleppo Or All Cooperation Ends | ZeroHedge
- Not Even An OPEC Deal Will Stop Oil Going Lower, Goldman Warns | ZeroHedge
- You Want to Fix the Economy? Then First Fix Healthcare | Financial Sense
The most relevant financial news and articles from the Internets
- His medical bills went from $12,000 to $0. Now he'... | Business Insider
- There's far too much complacency in the markets right now... | Business Insider
- JJ Watt will 'probably' miss the rest of the season with a back injury | Business Insider
- 12 sneaky ways online retailers get you to spend more | Business Insider
- Merkel and Erdogan say Russia has 'special... | Business Insider
- The new era of payment processing will change everything | Business Insider
- Giuliani said Trump 'isn’t fond of... | Business Insider