Income Alerts Newsletter for 01/03/2017

Safety First

With capital preservation as our most important priority, we begin as always with a focus on index covered calls, which mitigate company specific risk.

Writing covered calls on ETFs, such as QQQs, is attractive to conservative investors who may not have the time to monitor a selection of companies on a watchlist and wish to avoid risks associated with trading specific companies, such as earnings surprises.

The QQQ options at strike $118.50 for January 27 2017 are offering a 1.74% return, which annualizes at a rate of 25.45%.

Chart for QQQ

The DIA options at strike $198.00 for January 27 2017 are offering a 1.10% return, which annualizes at a rate of 16.74%.

Chart for DIA

The SPY options at strike $224.00 for January 25 2017 are offering a 1.09% return, which annualizes at a rate of 18.08%.

Chart for SPY


Technology Focus: Income Opportunities

A January covered call on AAPL at strike $116.00 using 300 shares is offering an income potential of $534. In February, a strike 120.00 covered call offers $573 and in March, a strike 120.00 covered call offers $765 in premium.

The annualized return by writing covered calls in January is 31.65%, in February is 13.30% and in March is 11.10%.

Chart for AAPL


Energy Focus: Income Opportunities

A January covered call on APC at strike $70.00 using 300 shares is offering an income potential of $537. In February, a strike 70.00 covered call offers $990 and in May, a strike 70.00 covered call offers $1,740 in premium.

The annualized return by writing covered calls in January is 53.43%, in February is 39.42% and in May is 24.17%.

Chart for APC

A January covered call on EOG at strike $102.00 using 300 shares is offering an income potential of $582. In February, a strike 105.00 covered call offers $699 and in April, a strike 105.00 covered call offers $1,410 in premium.

The annualized return by writing covered calls in January is 39.67%, in February is 18.72% and in April is 16.33%.

Chart for EOG


Healthcare Focus: Income Opportunities

A January covered call on PFE at strike $32.50 using 300 shares is offering an income potential of $156. In February, a strike 33.00 covered call offers $180 and in March, a strike 33.00 covered call offers $237 in premium.

The annualized return by writing covered calls in January is 31.26%, in February is 14.62% and in March is 12.13%.

Chart for PFE

A January covered call on HCA at strike $74.50 using 300 shares is offering an income potential of $465. In February, a strike 75.00 covered call offers $780 and in March, a strike 75.00 covered call offers $990 in premium.

The annualized return by writing covered calls in January is 43.37%, in February is 28.89% and in March is 23.02%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A January covered call on ADM at strike $46.00 using 300 shares is offering an income potential of $225. In February, a strike 46.00 covered call offers $435 and in March, a strike 46.00 covered call offers $531 in premium.

The annualized return by writing covered calls in January is 33.87%, in February is 26.03% and in March is 19.90%.

Chart for ADM

A January covered call on CVS at strike $79.00 using 300 shares is offering an income potential of $405. In February, a strike 80.00 covered call offers $585 and in March, a strike 80.00 covered call offers $768 in premium.

The annualized return by writing covered calls in January is 35.30%, in February is 20.11% and in March is 16.54%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A January covered call on CMCSA at strike $69.50 using 300 shares is offering an income potential of $450. In February, a strike 70.00 covered call offers $570 and in April, a strike 70.00 covered call offers $870 in premium.

The annualized return by writing covered calls in January is 21.05%, in February is 21.97% and in April is 14.55%.

Chart for CMCSA

A January covered call on FOXA at strike $28.50 using 300 shares is offering an income potential of $105. In February, a strike 29.00 covered call offers $195 and in April, a strike 29.00 covered call offers $315 in premium.

The annualized return by writing covered calls in January is 24.28%, in February is 18.43% and in April is 12.91%.

Chart for FOXA


Financials Focus: Income Opportunities

A January covered call on BAC at strike $22.50 using 300 shares is offering an income potential of $144. In February, a strike 23.00 covered call offers $183 and in March, a strike 23.00 covered call offers $252 in premium.

The annualized return by writing covered calls in January is 42.65%, in February is 22.04% and in March is 19.23%.

Chart for BAC

A January covered call on GS at strike $240.00 using 300 shares is offering an income potential of $1,845. In February, a strike 240.00 covered call offers $2,820 and in April, a strike 240.00 covered call offers $4,200 in premium.

The annualized return by writing covered calls in January is 50.64%, in February is 31.73% and in April is 20.61%.

Chart for GS


Industrials Focus: Income Opportunities

A January covered call on UNP at strike $104.00 using 300 shares is offering an income potential of $789. In February, a strike 105.00 covered call offers $945 and in May, a strike 105.00 covered call offers $1,575 in premium.

The annualized return by writing covered calls in January is 50.00%, in February is 24.33% and in May is 14.11%.

Chart for UNP

A January covered call on UTX at strike $110.00 using 300 shares is offering an income potential of $447. In February, a strike 110.00 covered call offers $852 and in May, a strike 110.00 covered call offers $1,395 in premium.

The annualized return by writing covered calls in January is 27.94%, in February is 21.10% and in May is 11.80%.

Chart for UTX


Materials Focus: Income Opportunities

A January covered call on NEM at strike $34.50 using 300 shares is offering an income potential of $363. In February, a strike 35.00 covered call offers $543 and in March, a strike 35.00 covered call offers $690 in premium.

The annualized return by writing covered calls in January is 74.67%, in February is 44.52% and in March is 35.71%.

Chart for NEM

A January covered call on MON at strike $106.00 using 300 shares is offering an income potential of $135. In April, a strike 110.00 covered call offers $531 in premium.

The annualized return by writing covered calls in January is 8.71% and in April is 5.73%.

Chart for MON


Utilities Focus: Income Opportunities

A January covered call on ED at strike $75.00 using 300 shares is offering an income potential of $180. In February, a strike 75.00 covered call offers $375 and in May, a strike 75.00 covered call offers $750 in premium.

The annualized return by writing covered calls in January is 16.65%, in February is 13.69% and in May is 9.36%.

Chart for ED

A January covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $480. In February, a strike 120.00 covered call offers $885 and in March, a strike 120.00 covered call offers $990 in premium.

The annualized return by writing covered calls in January is 27.53%, in February is 20.09% and in March is 14.01%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A January covered call on VZ at strike $53.50 using 300 shares is offering an income potential of $162. In February, a strike 55.00 covered call offers $162 and in March, a strike 55.00 covered call offers $240 in premium.

The annualized return by writing covered calls in January is 20.72%, in February is 8.11% and in March is 7.50%.

Chart for VZ

A January covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $360. In February, a strike 105.00 covered call offers $735 and in March, a strike 105.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in January is 23.84%, in February is 19.28% and in March is 18.33%.

Chart for SBAC

* Prices quoted were as of time of writing and may not be current.

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