Covered Call Picks (CLSN,MBI,GMCR,MCP,AGO)
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.
Celsion Corp (CLSN) is currently trading at $7.58. Its 52 week range is between $1.63 and $7.86.
MBIA Inc (MBI) is currently trading at $8.56. Its 52 week range is between $6.78 and $13.5.
Green Mountain Coffee Roasters Inc (GMCR) is currently trading at $28.95. Its 52 week range is between $17.11 and $71.15.
Molycorp Inc (MCP) is currently trading at $8.47. Its 52 week range is between $5.75 and $35.79.
Assured Guaranty Ltd (AGO) is currently trading at $13.9. Its 52 week range is between $9.22 and $19.04.
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
- Artist's Impression Of "Change" After Obama's Historic Immigration Decree | ZeroHedge
- Goldman's Two-Word Summary Of The PBOC Rate Cut: "Slightly Useful" | ZeroHedge
- 5 Things To Ponder: Rising Risk | ZeroHedge
- RBS Shares Tumble After Admitting Stress Test "Error" | ZeroHedge
- On The Looming Wall Of Chinese Defaults, Restructuring Firm Warns "You Know It's Coming" | ZeroHedge
- In Addition To China, Here Is What Other Central-Banks Moved Overnight Markets | ZeroHedge
- Did The Tech Bubble Just Quietly Pop? | ZeroHedge
The most relevant financial news and articles from the Internets
- South Korean export muscle sapped by weak yen | Business Insider
- ... | StreetInsider.com
- Twitter Engineer Turned VC Mike Abbott: How To Get In On A Multi-Billion Market | Business Insider
- Detroit Pistons Coach Stan Van Gundy Had The Perfect... | Business Insider
- Mike Rowe Reveals What He Considers To Be The Toughest Job In America | Business Insider
- Fans Aren’t Impressed With The Trailer For George Lucas’s First Animated Movie 'Strange... | Business Insider
- Laptop Computer Reviews - BusinessWeek | BusinessWeek