Covered Call Picks (VRNG,AMRN,ZNGA,ISIS,GRPN)
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.
|VRNG||Vringo Inc||3.19||3.5||0.8||25.10%||November 2012|
|AMRN||Amarin Corporation PLC||12||12||1.8||15.00%||November 2012|
|ZNGA||Zynga Inc||2.84||3||0.3||10.20%||November 2012|
|ISIS||Isis Pharmaceuticals Inc||14||15||1.4||10.00%||November 2012|
|GRPN||Groupon Inc||4.7||5||0.5||9.60%||November 2012|
Vringo Inc (VRNG) is currently trading at $3.19. Its 52 week range is between $0.68 and $5.45.
Amarin Corporation PLC (AMRN) is currently trading at $11.99. Its 52 week range is between $5.99 and $15.96.
Zynga Inc (ZNGA) is currently trading at $2.84. Its 52 week range is between $2.66 and $15.91.
Isis Pharmaceuticals Inc (ISIS) is currently trading at $14.04. Its 52 week range is between $6.25 and $15.61.
Groupon Inc (GRPN) is currently trading at $4.7. Its 52 week range is between $4 and $31.14.
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
- Argentine President "Convinced" Nisman Death Was Not Suicide As New Twists Emerge | ZeroHedge
- In America, Government Pays You Interest. In Switzerland, You Pay Government. | Financial Sense
- What Crispin Odey, And His $12.4 Billion In AUM, Thinks Are The 6 Risks Underpriced By The Market | ZeroHedge
- Friday Humor: Hitler Realizes He Was Short Swiss Francs | ZeroHedge
- Russell Napier: "Central Banks Are Now Powerless To Prevent A Steep Rise In Real Rates" | ZeroHedge
- Robin Griffiths Sees Topping Process in Stocks, Expects Bear Market This Year | Financial Sense
- Congress Proposes Bill To Restore First Amendment Rights... Then Kills It | ZeroHedge
The most relevant financial news and articles from the Internets
- FedEx Says Earnings Will Be Fine After Its Rival UPS Forecasts A Big Miss (FDX, UPS) | Business Insider
- What I Heard Inside One Of Those Mysterious Closed-Door Meetings At Davos | Business Insider
- Netflix Makes a Splash at Sundance by Unveiling Its First Movie | TheStreet.com
- Here's What The Mural On The Outside Of Apple's New Store In China... | Business Insider
- Here's How The Saudi National Guard Maintains The... | Business Insider
- Successful Marriages And Employer-Employee Relationships Share This... | Business Insider
- A Few Totally Over The Top NYC Super Bowl Parties We've Stumbled On | Business Insider