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
- Thank You US Taxpayers: Russia-Ukraine Agree Terms On Gas-Supply Through March | ZeroHedge
- BusinessWeek Wants YOU To Become A Keynesian Debt Slave | ZeroHedge
- A Glimpse Inside The FX "Cartel's" Chat Rooms | ZeroHedge
- Why We're Poorer: Inflation And Deflation Are Now Globalized | ZeroHedge
- Oil Breaks Below $80 | Financial Sense
- Market Breaks As Stocks Explode Higher On Algo-Triggering Headline | ZeroHedge
- The Biotech Pain Trade | iBankCoin.com
The most relevant financial news and articles from the Internets
- First class Murray books ticket to London | Business Insider
- Michael Jordan Explains The Biggest Way The NBA Has Changed For The Worse Since He Played | Business Insider
- The Main Difference Between Google's Rising Star Sundar Pichai And CEO Larry Page... | Business Insider
- Hallucinogens Legally Sold as 'Bath Salts' a New Threat | BusinessWeek
- STOCKS SURGE TO RECORD HIGH: Here's What You Need To Know (DIA, SPY, SPX, QQQ) | Business Insider
- Meet Our New West Coast Bureau Chief, Matt Rosoff | Business Insider
- Notable... | StreetInsider.com