Covered Call Picks (ALXA,AMRN,CLF,ISIS,DNDN)
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.
Alexza Pharmaceuticals Inc (ALXA) is currently trading at $4.75. Its 52 week range is between $2.55 and $11.5.
Amarin Corporation PLC (AMRN) is currently trading at $10.49. Its 52 week range is between $5.99 and $15.96.
Cliffs Natural Resources Inc (CLF) is currently trading at $30.48. Its 52 week range is between $32.25 and $78.85.
Isis Pharmaceuticals Inc (ISIS) is currently trading at $8.94. Its 52 week range is between $6.43 and $15.61.
Dendreon Corp (DNDN) is currently trading at $4.33. Its 52 week range is between $3.69 and $17.04.
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
- ISIS Releases "Greatest" Piece Of Terrorist Video Propaganda In History, Tells US, Russia To "Bring It On" | ZeroHedge
- Goldman Finally Looks At The Freight Charts, Raises Alarm About The "Broader Health Of The US Economy" | ZeroHedge
- High-Frequency Traders Face Crackdown As CFTC Proposes Tougher Regulations - Live Feed | ZeroHedge
- Robbery In Progress At Chase Branch On 6th Avenue In Downtown Manhattan | ZeroHedge
- New Home Sales Miss As Median Price Drops To Lowest In 13 Months | ZeroHedge
- Did Mario Draghi Just Leak The Bazooka? Two-Tiered NIRP System May Presage Big Rate Cut | ZeroHedge
- The Triumph Of Materialism: The Average American Will Spend 830 Dollars On Christmas In 2015 | ZeroHedge
The most relevant financial news and articles from the Internets
- Teen charged as adult in Philadelphia trooper shooting | Business Insider
- Redskins could play twice in London next season | Business Insider
- Suspect dead after shooting kills 3 in Ohio, injures 4th | Business Insider
- Tony Robbins on the easiest way to change... | Business Insider
- 3 Trends for the holidays | Business Insider
- The ultimate gag gift guide for your office holiday party | Business Insider
- The US government spent more than $20 billion on a certain kind of drugs for seniors in a year... | Business Insider