Income Alerts Newsletter for 01/09/2017

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 $122.00 for February 3 2017 are offering a 1.36% return, which annualizes at a rate of 19.91%.

Chart for QQQ

The DIA options at strike $200.00 for February 3 2017 are offering a 0.94% return, which annualizes at a rate of 13.74%.

Chart for DIA

The SPY options at strike $227.50 for February 3 2017 are offering a 1.00% return, which annualizes at a rate of 14.60%.

Chart for SPY


Technology Focus: Income Opportunities

A January covered call on FB at strike $124.00 using 300 shares is offering an income potential of $447. In February, a strike 125.00 covered call offers $1,170 and in March, a strike 125.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in January is 37.17%, in February is 29.78% and in March is 21.72%.

Chart for FB

A January covered call on BABA at strike $94.00 using 300 shares is offering an income potential of $498. In February, a strike 95.00 covered call offers $1,050 and in April, a strike 95.00 covered call offers $1,560 in premium.

The annualized return by writing covered calls in January is 43.80%, in February is 32.87% and in April is 20.19%.

Chart for BABA


Energy Focus: Income Opportunities

A January covered call on APC at strike $72.00 using 300 shares is offering an income potential of $411. In February, a strike 72.50 covered call offers $846 and in May, a strike 72.50 covered call offers $1,620 in premium.

The annualized return by writing covered calls in January is 47.37%, in February is 34.73% and in May is 22.17%.

Chart for APC

A January covered call on HAL at strike $57.00 using 300 shares is offering an income potential of $261. In February, a strike 60.00 covered call offers $276 and in March, a strike 60.00 covered call offers $432 in premium.

The annualized return by writing covered calls in January is 37.95%, in February is 14.01% and in March is 13.41%.

Chart for HAL


Healthcare Focus: Income Opportunities

A January covered call on PFE at strike $33.50 using 300 shares is offering an income potential of $117. In February, a strike 34.00 covered call offers $150 and in March, a strike 34.00 covered call offers $204 in premium.

The annualized return by writing covered calls in January is 35.85%, in February is 13.83% and in March is 11.13%.

Chart for PFE

A January covered call on GILD at strike $75.50 using 300 shares is offering an income potential of $420. In February, a strike 77.50 covered call offers $660 and in March, a strike 77.50 covered call offers $810 in premium.

The annualized return by writing covered calls in January is 57.48%, in February is 27.39% and in March is 19.91%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A January covered call on KO at strike $42.00 using 300 shares is offering an income potential of $81. In February, a strike 42.00 covered call offers $225 and in March, a strike 42.00 covered call offers $276 in premium.

The annualized return by writing covered calls in January is 19.80%, in February is 16.70% and in March is 12.10%.

Chart for KO

A January covered call on PEP at strike $105.00 using 300 shares is offering an income potential of $237. In February, a strike 105.00 covered call offers $564 and in April, a strike 105.00 covered call offers $852 in premium.

The annualized return by writing covered calls in January is 23.16%, in February is 16.71% and in April is 9.89%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A January covered call on GM at strike $36.00 using 300 shares is offering an income potential of $279. In February, a strike 36.00 covered call offers $447 and in March, a strike 36.00 covered call offers $510 in premium.

The annualized return by writing covered calls in January is 64.55%, in February is 36.66% and in March is 25.49%.

Chart for GM

A January covered call on HD at strike $134.00 using 300 shares is offering an income potential of $447. In February, a strike 135.00 covered call offers $759 and in March, a strike 135.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in January is 34.32%, in February is 17.62% and in March is 14.87%.

Chart for HD


Financials Focus: Income Opportunities

A January covered call on JPM at strike $86.50 using 300 shares is offering an income potential of $414. In February, a strike 87.50 covered call offers $600 and in March, a strike 87.50 covered call offers $840 in premium.

The annualized return by writing covered calls in January is 39.63%, in February is 20.18% and in March is 17.28%.

Chart for JPM

A January covered call on MET at strike $54.50 using 300 shares is offering an income potential of $228. In February, a strike 55.00 covered call offers $429 and in March, a strike 55.00 covered call offers $561 in premium.

The annualized return by writing covered calls in January is 43.27%, in February is 24.74% and in March is 19.19%.

Chart for MET


Industrials Focus: Income Opportunities

A January covered call on HTZ at strike $25.00 using 300 shares is offering an income potential of $120. In April, a strike 25.00 covered call offers $765 in premium.

The annualized return by writing covered calls in January is 42.52% and in April is 42.34%.

Chart for HTZ

A January covered call on UPS at strike $116.00 using 300 shares is offering an income potential of $279. In February, a strike 120.00 covered call offers $213 and in April, a strike 120.00 covered call offers $507 in premium.

The annualized return by writing covered calls in January is 19.77%, in February is 5.25% and in April is 5.12%.

Chart for UPS


Materials Focus: Income Opportunities

A January covered call on MON at strike $110.00 using 300 shares is offering an income potential of $84. In February, a strike 110.00 covered call offers $180 and in March, a strike 110.00 covered call offers $315 in premium.

The annualized return by writing covered calls in January is 7.90%, in February is 5.09% and in March is 5.26%.

Chart for MON

A January covered call on NEM at strike $35.50 using 300 shares is offering an income potential of $309. In February, a strike 36.00 covered call offers $513 and in March, a strike 36.00 covered call offers $690 in premium.

The annualized return by writing covered calls in January is 72.88%, in February is 43.06% and in March is 35.70%.

Chart for NEM


Utilities Focus: Income Opportunities

A February covered call on AEP at strike $65.00 using 300 shares is offering an income potential of $180. In May, a strike 65.00 covered call offers $450 in premium.

The annualized return by writing covered calls in February is 8.75% and in May is 6.78%.

Chart for AEP

A February covered call on AES at strike $12.00 using 300 shares is offering an income potential of $75. In May, a strike 12.00 covered call offers $180 in premium.

The annualized return by writing covered calls in February is 18.34% and in May is 14.57%.

Chart for AES


Telecommunications Focus: Income Opportunities

A January covered call on VOD at strike $26.50 using 300 shares is offering an income potential of $81. In February, a strike 27.00 covered call offers $141 and in April, a strike 27.00 covered call offers $261 in premium.

The annualized return by writing covered calls in January is 31.64%, in February is 16.65% and in April is 12.16%.

Chart for VOD

A January covered call on VZ at strike $53.50 using 300 shares is offering an income potential of $144. In February, a strike 55.00 covered call offers $153 and in March, a strike 55.00 covered call offers $228 in premium.

The annualized return by writing covered calls in January is 22.13%, in February is 8.21% and in March is 7.44%.

Chart for VZ

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

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