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
- Iraq and Syria Follow Lebanon’s Precedent | Financial Sense
- Angelo Mozilo Responds To Charges:: “No, No, No, We Didn’t Do Anything Wrong” | ZeroHedge
- Chinese Commodity Crash Continues, But Pigs Are Flying | ZeroHedge
- Russia Slams Barroso Over Leaked "Take Kiev In 2 Weeks" Comments, Revises Military Doctrine | ZeroHedge
- Riding the Wave Lower in This Stock | iBankCoin.com
- Bank of Japan Refrains From Deepening Stimulus | Financial Sense
- Stop Bearing with Your Snooty Barista | iBankCoin.com
The most relevant financial news and articles from the Internets
- How the American Air Merger Helped Charlotte, Philly and Fort Wayne | TheStreet.com
- 11 TED Talks That Will Help You Lead A Happier Life | Business Insider
- Ocean City, Md.: America's Most Affordable Fun City | BusinessWeek
- The Truth About Sapphire, The Insanely Hard Material Apple May Use For The iPhone 6... | Business Insider
- 10 Things You Need To Know Before The Opening Bell (DIA, SPY, QQQ, DG, FDO) | Business Insider
- At least half a million displaced in Ukraine: UN | Business Insider
- Cramer: What's Working, What's Not | TheStreet.com