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
- Greferendum Results In Landslide "No" Victory | ZeroHedge
- Saturday Cinema with Le Fly: The Crash (1932) | iBankCoin.com
- The Central Bankers Dilemma: The Pendulum’s Back Swing | ZeroHedge
- Whole Foods, Half Lies | ZeroHedge
- Panic: China Central Bank Steps In To Bailout Stocks As Underwater Traders Pray For A Rebound | ZeroHedge
- Athenian Democracy vs. Neoliberal Gods | ZeroHedge
- Risk Off: FX Carry Trades Tumble, Euro Opens Under 1.10; USDJPY Under 121 | ZeroHedge
The most relevant financial news and articles from the Internets
- One piece of evidence has 'Game of Thrones' fans hopeful Jon Snow... | Business Insider
- Batman wasn't originally supposed to be in the 'Batman v... | Business Insider
- These paddle boarders were just feet away from the largest animal on Earth | Business Insider
- An extra period in the Declaration of Independence might change our... | Business Insider
- Here's what... | Business Insider
- Tech bigshots are upset about an alleged '... | Business Insider
- Thousands greet pope at start of South American trip | Business Insider