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
- You Know Your Country Is Broke When... | ZeroHedge
- Waiting for a Lift | iBankCoin.com
- Gold - Watch the €1000 Level | Financial Sense
- Five Stocks with Old School Sass Today | iBankCoin.com
- Larry Ellison Steps Down As CEO Of Oracle | ZeroHedge
- Silver & Small Caps Slump As Bonds & Dollar Jump | ZeroHedge
- What Is the VIX Fear Index Telling Us Now? | Financial Sense
The most relevant financial news and articles from the Internets
- U.S. Kids Using Media Almost 8 Hours a Day - BusinessWeek | BusinessWeek
- New Ukraine peace talks begin in Minsk: AFP | Business Insider
- The UK Is Now Considering A Ban On Scottish People Voting On '... | Business Insider
- Apple Pay, Mobile Payments, And NFC:... | Business Insider
- Even Kevin Lynch's Wife Had No Idea He Was Working On The Apple... | Business Insider
- Why Major Companies Like Oracle, Whole Foods, And Chipotle Have 2 CEOs | Business Insider
- Dollar Spikes To Highest Level Against Yen Since 2008 (USD, JPY) | Business Insider