First Asset Can- Fin. Covered Call

FXF-T

0.00
0.00 (0.00%)
This company is not ACTIVE.

Analysis and Opinions about FXF-T

Signal
Opinion
Expert
DON'T BUY
DON'T BUY
October 30, 2013

You have to look at Covered Calls and see how they work. E.G. He has a stock at $20 and is going to sell a December $22 Call for $0.50. He brings in $0.50 and he can do anything he wants with it. However, he has entered into an obligation in that if he is Called he has to sell his stocks at $22. In December, if the stock is at $25, he has to sell his at $22. Therefore, in this case, if you are bullish on financials, you do not want to be in a Covered Call situation. In a Bearish or Bullish market that is going up or down, this is not the thing to own.

You have to look at Covered Calls and see how they work. E.G. He has a stock at $20 and is going to sell a December $22 Call for $0.50. He brings in $0.50 and he can do anything he wants with it. However, he has entered into an obligation in that if he is Called he has to sell his stocks at $22. In December, if the stock is at $25, he has to sell his at $22. Therefore, in this case, if you are bullish on financials, you do not want to be in a Covered Call situation. In a Bearish or Bullish market that is going up or down, this is not the thing to own.

Michael Bowman
Portfolio Manager, Wickham Investment Management
Price
$9.900
Owned
No
Showing 1 to 1 of 1 entries
  • «
  • 1
  • »