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
- Eurozone Holding Up Despite Greece | Financial Sense
- STTG Market Recap Feb 27, 2015 | FundMyMutualFund
- EM Euro Issuance Will Be Highest In A Decade On QE | ZeroHedge
- OPEC’s Influence Has Long Been Exaggerated | Financial Sense
- Was The Government Lying Then, Or Now? | ZeroHedge
- When Centralization Scales Beyond Our Control | ZeroHedge
- Presenting AAPL's Reaction To The Worst Manufacturing Report In 6 years | ZeroHedge
The most relevant financial news and articles from the Internets
- Tim Cook on privacy: 'We shouldn't give in to scare-mongering... | Business Insider
- LIVE: Warren Buffett's 50th letter to Berkshire... | Business Insider
- Warren Buffett is endorsing one of the hottest startups on the planet | Business Insider
- Ton-up Root stars, Pakistan seek Zimbabwe boost... | Business Insider
- Former NBA player Anthony Mason has died at age 48 | Business Insider
- The 40 smartest people of all time | Business Insider
- Yasar Kemal, Turkey's literary giant, dies aged 92 | Business Insider