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
- As The Sohn Conference Begins, This Is How Last Year's Hedge Fund Picks Did | ZeroHedge
- GoLDMaN TRuMP... | ZeroHedge
- From Dollar Daze to Dollar Days | Financial Sense
- EXTReMeLY DaNGeRouS I.U.D. | ZeroHedge
- EIA Petroleum Weekly Report Analysis 5-4-2016 (Video) | ZeroHedge
- Apple Runs Afoul of China’s Changing Internet | Financial Sense
- Sinko Day Stocko - Crude Pump'n'Dump Leads Trannie Slump | ZeroHedge
The most relevant financial news and articles from the Internets
- Canada is rejecting the visas of two immigrants that work... | Business Insider
- TRUMP: 'The books are cooked against Bernie!' | Business Insider
- The top 5 digital trends for 2016 | Business Insider
- T-Pain talks to us about his obsession with 'Game of Thrones,'... | Business Insider
- This poignant photo is a reminder of the people forgotten in the immigration debate | Business Insider
- Here's what you actually see while you're watching a meteor shower | Business Insider
- The manufacturing industry is being revolutionized by the Internet of Things | Business Insider