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
- To Junk Bond Traders "It Almost Feels Like 2008" | ZeroHedge
- Stocks, Bonds, & Bullion Bid As Geopolitical Risk Soars Most In 62 years | ZeroHedge
- THaNKSGiViNG 2015... | ZeroHedge
- Frontrunning: November 25 | ZeroHedge
- Distressed-Debt Losses Worst Since 2008 - "It's Not Just Energy, It's Everything" | ZeroHedge
- With Mass Shootings, The State Makes Us Less Safe | ZeroHedge
- Overheard At The Trumpsgiving Day Parade | ZeroHedge
The most relevant financial news and articles from the Internets
- 9 crazy math facts that people refuse to believe are true | Business Insider
- Hungary to issue bonds in yuan to attract Chinese... | Business Insider
- 3 Trends for the holidays | Business Insider
- This app lets you see Wi-Fi pulsing around you —... | Business Insider
- French president to visit Moscow for terrorism talks | Business Insider
- 'Tokyo Story' star Setsuko Hara dies at 95 | Business Insider
- This glowing whale-size, worm-like animal is one of the weirdest things in the... | Business Insider