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
- THE TIM COOK BOTTOM OR TOP? | iBankCoin.com
- Meet “OSHbot” Lowes New Store Helper; Goodbye Retail Associates, Hello Robots | Financial Sense
- Big Four Economic Indicators Show Possible Rollover | Financial Sense
- Markets Explode Higher As Bank Of Japan Goes All-In-er; Increases QE To JPY 80 Trillion | ZeroHedge
- The Annotated "Hillary" | ZeroHedge
- Life Lessons To Derive From QE And Stress Tests | ZeroHedge
- The Colder War: How the Global Energy Trade Slipped From America's Grasp | Financial Sense
The most relevant financial news and articles from the Internets
- Tens of thousands demand 'immediate'... | Business Insider
- One Map Shows Exactly What Obamacare Has Done To The Country | Business Insider
- Hamilton seeks to divert attention from F1's problems | Business Insider
- LeBron Is The Sun | Business Insider
- This App Predicts When You're Going To Die | Business Insider
- Russia central bank hikes interest rate to 9.5% from 8.0%... | Business Insider
- Laptop Computer Reviews - BusinessWeek | BusinessWeek