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
- Oil Jumps As Houthis Enter El-Mandeb Strait Military Base | ZeroHedge
- Despite Short-Squeeze-Driven Buying-Frenzy, Window-Dressed Stocks Remain Red For March | ZeroHedge
- Felix Zulauf: Asset Prices Will Continue to Inflate as China Joins the Party Next | Financial Sense
- The 'Obama' Warning System | ZeroHedge
- "It's Not Bearish, It's Simply Sane" | ZeroHedge
- Dallas Fed Collapses At Fastest Pace Since Lehman, Lowest Since June 2011 | ZeroHedge
- The Fed's Startling Student Debt Numbers That Every Young Person Should See | ZeroHedge
The most relevant financial news and articles from the Internets
- The Final Four is set — and Kentucky is the overwhelming favorite to win it all | Business Insider
- Varoufakis says blame game helps Europe's enemies | Business Insider
- Ten Things Only Bad Managers Say | BusinessWeek
- America's Best Young Entrepreneurs 2011 | BusinessWeek
- Unusual 11 Mid-... | StreetInsider.com
- JP Morgan CEO Jamie Dimon once told Elizabeth Warren to 'hit' him with... | Business Insider
- Ocean City, Md.: America's Most Affordable Fun City | BusinessWeek