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
- July 26-27 – The Fed Will Put Us on Notice for a September 20-21 Rate Hike | Financial Sense
- No ID, No Problem - Feds Overrule North Carolina Voting Rules As "Discriminatory" | ZeroHedge
- Why Social Fragmentation Suits The Powers That Be | ZeroHedge
- Tale of Two Economies: Industrial vs. Consumer | Financial Sense
- Even Bank of America Is Losing It: "Bring On The Herikoputa!" | ZeroHedge
- Outbreak? Russian Bio Warfare Troops Rushed To Arctic Due To "Dangerous Infection" | ZeroHedge
- 17,359 Americans Have Renounced Citizenship Under Barack Obama | ZeroHedge
The most relevant financial news and articles from the Internets
- Men in Iran are standing up to the 'morality... | Business Insider
- Robo-advisors have a $2 trillion opportunity in front of them | Business Insider
- Is Lending Club's crash a preview of fintech's... | Business Insider
- Avoid these 15 ingredients that can be found in many supplements | Business Insider
- 34 things all college kids should do before they graduate | Business Insider
- Watch Chelsea Clinton's full speech as she introduced her mother on the... | Business Insider
- France has detained a Syrian refugee in connection... | Business Insider