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
- Panic-Buyers Lift WTI Crude Back Over $48 | ZeroHedge
- SEC - Do Your Job!! | ZeroHedge
- Immigrants Dwarf American Households In Welfare: "Obama Seeks $17K For Every Illegal Minor" | ZeroHedge
- Hedge Fund CIO Explains Why Most Missed The Oil Rally | ZeroHedge
- Plunge in Online Job Postings Raises Red Flag | Financial Sense
- Dramatic Time-Lapse Animation Showing America's Absurd Million Dollar Home Bubbles | ZeroHedge
- Is This The Scariest Chart Out There? | ZeroHedge
The most relevant financial news and articles from the Internets
- Pilot's-eye-view shows how close these Turkish jets get during acrobatic... | Business Insider
- A mom's permission slip that 'respectfully asks that you let her kids be... | Business Insider
- Mark Cuban's foray into politics has reached new heights | Business Insider
- Spanish journalist feared kidnapped by Colombian rebels | Business Insider
- Forget earnings — dividends have been the hottest... | Business Insider
- Samsung Pay strikes key deal with Alipay (BABA) | Business Insider
- A top US commander made a secret trip to a Syrian warzone | Business Insider