Biotech Covered Call Picks (SRPT,NAVB,AMRN,DNDN,ALXA)
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.
Sarepta Therapeutics Inc (SRPT) is currently trading at $14.92. Its 52 week range is between $2.6 and $16.32.
Navidea Biopharmaceuticals Inc (NAVB) is currently trading at $3.8. Its 52 week range is between $2.05 and $4.77.
Amarin Corporation PLC (AMRN) is currently trading at $14.64. Its 52 week range is between $5.99 and $15.96.
Dendreon Corp (DNDN) is currently trading at $4.98. Its 52 week range is between $4.17 and $17.04.
Alexza Pharmaceuticals Inc (ALXA) is currently trading at $4.55. Its 52 week range is between $2.55 and $14.8.
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
- Secular Trends in New Residential Building Permits and Housing Starts | Financial Sense
- China Establishes World's Largest Physical Gold Fund | ZeroHedge
- Greece Was 20 Votes Away From Defaulting This Weekend | ZeroHedge
- The Case For Nationalizing Monsanto | ZeroHedge
- Argentina’s Growing Dependency on Beijing | Financial Sense
- MeMoRiaL DaY 2015: THe LaND OF THE FRee | ZeroHedge
- Another Decapitator-in-Chief Of America's Working Class | ZeroHedge
The most relevant financial news and articles from the Internets
- For some inexplicable reason Twitter has reportedly held talks to acquire... | Business Insider
- Here's what you get when you order 'Omaha Steaks' in the mail | Business Insider
- Britain poised for 'Brexit... | Business Insider
- Incredible GIFs show how a jet engine actually works | Business Insider
- Iraq PM rebuts US criticism of security forces | Business Insider
- Juan Pablo Montoya wins second Indy... | Business Insider
- Negotiations on TPP in 'end-game', says US... | Business Insider