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
- Forget Orwell And Rand, We’ve Gone To Full On Plato | ZeroHedge
- The Mystery Of America's "Schrodinger" Middle Class, Which Is Either Thriving Or About To Go Extinct | ZeroHedge
- Hugh Hendry Live 3: "To Bet Against China Is To Best Against Central Bank Omnipotence" | ZeroHedge
- Russia Might Be Forced to Cut Oil Production | Financial Sense
- BEHOLD: ANOTHER SPECULATIVE LONG | iBankCoin.com
- "We Fired Some Folks..." President Obama Discusses Chuck Hagel's Resignation - Live Feed | ZeroHedge
- Just 8 Numbers | ZeroHedge
The most relevant financial news and articles from the Internets
- European Stocks Are Up | Business Insider
- A Secret Message Hidden In A CIA... | Business Insider
- The NBA World Has Never Seen Anything Like Anthony Davis | Business Insider
- Starz May Finally Be Sold in Yet Another Killer Deal for John Malone | TheStreet.com
- Tunisians elect president for first time | Business Insider
- Meet Sparc, The Apple Store Of Marijuana Shops | Business Insider
- US police shoot dead boy, 12, holding toy gun | Business Insider