Covered Call Picks (ANR,MWW,GMCR,STX,LNG)
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.
Alpha Natural Resources Inc (ANR) is currently trading at $6.92. Its 52 week range is between $5.28 and $32.28.
Monster Worldwide Inc (MWW) is currently trading at $8.15. Its 52 week range is between $5.72 and $10.4.
Green Mountain Coffee Roasters Inc (GMCR) is currently trading at $30.36. Its 52 week range is between $17.11 and $115.98.
Seagate Technology PLC (STX) is currently trading at $29.87. Its 52 week range is between $9.05 and $35.71.
Cheniere Energy Inc (LNG) is currently trading at $15.72. Its 52 week range is between $3.17 and $18.92.
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
- Frontrunning: October 2 | ZeroHedge
- "They Just Don't Want A Job" - The Fed's Grotesque "Explanation" Why 94.6 Million Are Out Of The Labor Force | ZeroHedge
- Do You Have This Problem? | Altucher Confidential
- What If Expectations Of Our Central Bankers Are Simply Too High? | ZeroHedge
- Worth Wray on China's Failed Plan to Blow Stock Market Bubble and Attract Global Investors | Financial Sense
- The Reality Behind The Numbers In China's Boom-Bust Economy | ZeroHedge
- China Trolls Obama, Says "Routine" Mass Shootings Expose Failure Of U.S. Politics | ZeroHedge
The most relevant financial news and articles from the Internets
- Hallucinogens Legally Sold as 'Bath Salts' a New Threat | BusinessWeek
- 1 tweet from Hillary Clinton sent these stocks into a tailspin, and now Wall Street... | Business Insider
- A classic Wall Street TV show is getting closer to its former glory | Business Insider
- Louisville probing claim staffer got escorts for recruits... | Business Insider
- New Mormon leaders expected to be named at conference | Business Insider
- 25 Ways to Make LinkedIn Work for You | BusinessWeek
- Ocean City, Md.: America's Most Affordable Fun City | BusinessWeek