Covered Call Picks (DVAX,CSCO,FB,NFLX,FSLR)
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.
|DVAX||Dynavax Technologies Corp||4.74||5||0.5||10.50%||November 2012|
|CSCO||Cisco Systems Inc||16.9||17||0.5||2.80%||November 2012|
|FB||Facebook Inc||19.9||20||0.6||2.80%||November 2012|
|NFLX||Netflix Inc||79.6||80||1.8||2.30%||November 2012|
|FSLR||First Solar Inc||24.4||24.5||0.5||2.20%||November 2012|
Dynavax Technologies Corp (DVAX) is currently trading at $4.74. Its 52 week range is between $2.67 and $5.34.
Cisco Systems Inc (CSCO) is currently trading at $16.85. Its 52 week range is between $14.96 and $21.3.
Facebook Inc (FB) is currently trading at $19.86. Its 52 week range is between $17.55 and $45.
Netflix Inc (NFLX) is currently trading at $79.61. Its 52 week range is between $52.81 and $133.43.
First Solar Inc (FSLR) is currently trading at $24.4. Its 52 week range is between $11.43 and $51.89.
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
- Top 10 Wall Street Rookie Mistakes | ZeroHedge
- Mitt Romney Announces He Is Not Running For President: "Best To Give Other Leaders The Opportunity" | ZeroHedge
- Treasury Yields Are Crashing (Again) | ZeroHedge
- Caught On Tape: Dijsselbloem To Varoufakis: "You Just Killed Troika" | ZeroHedge
- The Official White House Terrorist Identification Chart | ZeroHedge
- 16% Of Global Government Bonds Now Have A Negative Yield: Here Is Who's Buying It | ZeroHedge
- Weekend Top 100 | iBankCoin.com
The most relevant financial news and articles from the Internets
- EU, US look for 'fresh start' in trade talks | Business Insider
- Jihadists increasingly wary of Internet, experts say | Business Insider
- Greece rejects new loans as money runs out | Business Insider
- The amazing reward all Shake Shack employees got today | Business Insider
- Djokovic wins third set to lead Murray 2-1 | Business Insider
- Greece says it won't cooperate with its bailout... | Business Insider
- Trading Radar... | StreetInsider.com