Covered Call Picks (GRPN,MMR,MCP,FSLR,ARNA)
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.
Groupon Inc (GRPN) is currently trading at $3.99. Its 52 week range is between $3.68 and $27.78.
McMoRan Exploration Co (MMR) is currently trading at $12.73. Its 52 week range is between $7.76 and $16.57.
Molycorp Inc (MCP) is currently trading at $9.79. Its 52 week range is between $9.4 and $42.9.
First Solar Inc (FSLR) is currently trading at $24.79. Its 52 week range is between $11.43 and $51.89.
Arena Pharmaceuticals Inc (ARNA) is currently trading at $7.6. Its 52 week range is between $1.27 and $13.5.
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
- Five Stocks Which May Appear Larger Than the Market Today | iBankCoin.com
- BACK IN HELL | iBankCoin.com
- Walking it Up and Down | iBankCoin.com
- US/European Equity Indices Are Tumbling As WWIII Trumps Buybacks | ZeroHedge
- Is Nuclear Energy Ready for a Comeback? | Financial Sense
- All About Silver & Gold | iBankCoin.com
- Jim Rickards on the Death of Money, China, and Financial Warfare | Financial Sense
The most relevant financial news and articles from the Internets
- How A Satellite TV Company Used Social Media To Give Viewers What They Wanted | Business Insider
- 'Game Of Thrones' Author George R.R. Martin Explains How A... | Business Insider
- Congressman Admits Congress Probably Won't Get... | Business Insider
- Business Insider Is Looking For An Awesome UI/UX Designer | Business Insider
- Starbucks Is Tapping Into 4 Major Growth Opportunities | Business Insider
- 23 Columbia Students File Landmark Sexual Assault Complaint | Business Insider
- Hallucinogens Legally Sold as 'Bath Salts' a New Threat | BusinessWeek