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
- OPEC Decision Is "Major Strike Against The American Market", Russian Tycoon Says | ZeroHedge
- California Housing Market Cracks in Two, Top End Goes Crazy | ZeroHedge
- Renewable Energy: Does It Need Critically Rare Materials? | Financial Sense
- Global Gold Demand Will Overwhelm the Manipulators | ZeroHedge
- For The World's Largest Rig Operator, The "Recovery" Is Now Worse Than The Post-Lehman Crash | ZeroHedge
- Something Is Wrong With This Chart | ZeroHedge
- Stuck In Reverse And Descending Into Trauma | ZeroHedge
The most relevant financial news and articles from the Internets
- The ‘Freemium’ Model Is Brilliant, But It’s Ruining My Life | Business Insider
- Notable... | StreetInsider.com
- ... | StreetInsider.com
- Laptop Computer Reviews - BusinessWeek | BusinessWeek
- Unusual 11 Mid-... | StreetInsider.com
- Suze Orman, Debit-Card Dealer | BusinessWeek
- Former Teammate Has A Theory On Why RG3 Has Been So Bad, And It Could End His Career | Business Insider