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
- The Fundamental Truth of the Market Matter | Financial Sense
- Has Deflation Been Defeated? | Financial Sense
- Epsilon Theory: Two Discoveries | Financial Sense
- Examining the Islamic State's Cyber Capabilities | Financial Sense
- Market Panics After Arrest Of Brazilian Lawmaker: "Never Have We Had So Little Certainty About Tomorrow" | ZeroHedge
- US Corporate Earnings, Overseas Sales and the Dollar | Financial Sense
- Hyperinflation Watch: Kazakhstan Unveils New 20,000 Tenge Banknote | ZeroHedge
The most relevant financial news and articles from the Internets
- Pope's rapper stance send Twitter in a flurry | Business Insider
- NBC's 'The Wiz Live!' to ease on down that... | Business Insider
- George Lucas hasn't looked at the internet in 15 years — this is why | Business Insider
- RBS and Standard Chartered came close to failing a... | Business Insider
- 'The Walking Dead' mid-season finale recreates a huge scene from the... | Business Insider
- Kobe Bryant announces he will retire at the end of the season | Business Insider
- 11 of the most incredible spy gadgets from CIA history | Business Insider