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
- Safe Havens Are Trouncing Stocks So Far This Year | Financial Sense
- Higher Inflation Expectations May Start With Breakfast | Financial Sense
- Late Night Strategy for Monday | iBankCoin.com
- Wide Spreads to Keep in Mind | iBankCoin.com
- Former US Defense Secretary Gates Admits "Crimea Will Not Slip Out Of Russia's Hands" | ZeroHedge
- Fukushima Radiation To Reach West Coast Next Month | ZeroHedge
- Payrolls Up 175K, Jobless Rate Climbs to 6.7% | Financial Sense
The most relevant financial news and articles from the Internets
- Here's The Tea Party's Version Of The Ellen Oscar Selfie | Business Insider
- This Cable Channel's Newest App Will Let You Watch 15 Second TV Shows | Business Insider
- Warning Shots Fired At International Monitors... | Business Insider
- Pre-Open... | StreetInsider.com
- John Kerry Made A Troubling Threat Over Russia's Annexation Of Crimea | Business Insider
- More Than 40 Arrested After UMass Party Spins Out Of Control | Business Insider
- New 'Game Of Thrones' Trailer Teases The Dragons | Business Insider