Covered Call Picks (ALXA,VHC,MCP,ANR,LEAP)
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.
|ALXA||Alexza Pharmaceuticals Inc||5.11||5.5||1.6||30.30%||December 2012|
|VHC||VirnetX Holding Corp||31||32||5.6||18.10%||December 2012|
|MCP||Molycorp Inc||10.9||11||1.2||10.80%||December 2012|
|ANR||Alpha Natural Resources Inc||8.43||9||0.9||10.20%||December 2012|
|LEAP||Leap Wireless International Inc||5.5||6||0.5||9.80%||December 2012|
Alexza Pharmaceuticals Inc (ALXA) is currently trading at $5.11. Its 52 week range is between $2.55 and $14.8.
VirnetX Holding Corp (VHC) is currently trading at $31.01. Its 52 week range is between $16.59 and $41.93.
Molycorp Inc (MCP) is currently trading at $10.93. Its 52 week range is between $9.4 and $42.9.
Alpha Natural Resources Inc (ANR) is currently trading at $8.43. Its 52 week range is between $5.28 and $29.29.
Leap Wireless International Inc (LEAP) is currently trading at $5.5. Its 52 week range is between $4.28 and $11.3.
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
- Damage Control: "Selfie At A Funeral" Photographer Explains What Really Happened | ZeroHedge
- US-Backed Syrian "Rebel" Commander Chased Out Of Country By Al Qaeda | ZeroHedge
- Trade Setups For Friday | iBankCoin.com
- World's Largest Hedge Fund Uses Twitter For Real-Time Economic Modeling | ZeroHedge
- Trade of the Century | ZeroHedge
- Daily Market Recap | Financial Sense
- New York City Has The Most Homeless Children Since The Great Depression | ZeroHedge
The most relevant financial news and articles from the Internets
- Instagram's New Photo Messaging Feature Is A Strong Response To Snapchat | Business Insider
- Pope Attacks Mega-Salaries And Big Bonuses In Peace Message... | Business Insider
- Advice for GM's CEO Mary Barra | TheStreet.com
- Those Terrible Bag Fees Are Keeping The Airline Industry Afloat | Business Insider
- Roth IRAs Aren't Always The Best Way To Save For Retirement | Business Insider
- 12 Fast-Growing, High-Paying Jobs In 2014 | Business Insider
- The Newest Angry Birds Racing Game Will Have You Hooked Right Away | Business Insider