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
- Oil Plunges As Venezuela Hints No Output Reduction | ZeroHedge
- "Failed" Bund Auction At Record Low Yield And All Other Key Overnight Events | ZeroHedge
- Nothing Has Changed - And That's The Problem | ZeroHedge
- Good News: GDP Revised Higher | Financial Sense
- 30 Year Yield Drops Below 3.00% As Richmond Fed Tumbles Most Since 2006 | ZeroHedge
- On This Day, 138 Years Ago, The Idea Of QE Was Born | ZeroHedge
- Something Is Wrong With This Chart | ZeroHedge
The most relevant financial news and articles from the Internets
- HP Pops Despite Missed Sales: What Wall Street's Saying | TheStreet.com
- Stocks Make Minor Moves on Light Pre-Thanksgiving Volume | TheStreet.com
- A Former Disney Imagineer Built This Incredible Survival Vehicle For His Daughter... | Business Insider
- Microsoft Accidentally Announced That It's Acquiring... | Business Insider
- AMERICA BEATS EXPECTATIONS (DIA, SPY, QQQ, TLT, IWM) | Business Insider
- 25 Ways to Make LinkedIn Work for You | BusinessWeek
- France's Stock Market Just Broke For Three And A Half... | Business Insider