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
- Drilling Our Way Into Oblivion: Shale Was About Land Gambling With Cheap Debt, Not Technological Miracles | ZeroHedge
- Chicago Mayor Rahm Emanuel's Teenage Son Mugged Near Home | ZeroHedge
- Meet Joe Lewis - The $200 Million "British Madoff" | ZeroHedge
- Weekday Wrap-Up: No Hyperinflation, Years of Low Oil Prices, and a Bubble in Stocks | Financial Sense
- Forget Lost Decade, Japan Has Been 'Losing' Since WWII | ZeroHedge
- The Hidden Leverage In "Shiny Objects" - Banks Sell Record Amount Of Equity-Linked Structured Notes | ZeroHedge
- A Word For You to Learn in 2015: SUPER-CONTANGO | iBankCoin.com
The most relevant financial news and articles from the Internets
- Sony Explains Why It Made 'The Interview' And Says It'd Make The... | Business Insider
- Madonna speaks of 'crazy times' after songs leaked | Business Insider
- China promises medical care for HIV-positive boy:... | Business Insider
- 14 Gifts Teenagers Will Actually Want | Business Insider
- Villarreal climb after seventh straight win | Business Insider
- Here's Why Instagram Demographics Are So Attractive To Brands | Business Insider
- America's Best Young Entrepreneurs 2011 | BusinessWeek