Income Alerts Newsletter for 01/10/2017

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 $122.50 for February 3 2017 are offering a 1.30% return, which annualizes at a rate of 19.77%.

Chart for QQQ

The DIA options at strike $199.00 for February 3 2017 are offering a 0.98% return, which annualizes at a rate of 14.24%.

Chart for DIA

The SPY options at strike $226.50 for February 3 2017 are offering a 1.05% return, which annualizes at a rate of 15.95%.

Chart for SPY


Technology Focus: Income Opportunities

A January covered call on FB at strike $125.00 using 300 shares is offering an income potential of $522. In February, a strike 125.00 covered call offers $1,410 and in March, a strike 125.00 covered call offers $1,650 in premium.

The annualized return by writing covered calls in January is 42.97%, in February is 35.68% and in March is 24.73%.

Chart for FB

A January covered call on BABA at strike $95.00 using 300 shares is offering an income potential of $453. In February, a strike 95.00 covered call offers $1,155 and in April, a strike 95.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in January is 49.27%, in February is 38.66% and in April is 22.27%.

Chart for BABA


Energy Focus: Income Opportunities

A January covered call on APC at strike $70.00 using 300 shares is offering an income potential of $432. In February, a strike 70.00 covered call offers $930 and in May, a strike 70.00 covered call offers $1,650 in premium.

The annualized return by writing covered calls in January is 63.90%, in February is 42.30% and in May is 23.77%.

Chart for APC

A January covered call on HAL at strike $56.50 using 300 shares is offering an income potential of $240. In February, a strike 60.00 covered call offers $216 and in March, a strike 60.00 covered call offers $363 in premium.

The annualized return by writing covered calls in January is 48.03%, in February is 12.17% and in March is 12.02%.

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 $108. In February, a strike 34.00 covered call offers $147 and in March, a strike 34.00 covered call offers $204 in premium.

The annualized return by writing covered calls in January is 36.08%, in February is 13.91% and in March is 11.30%.

Chart for PFE

A January covered call on GILD at strike $76.00 using 300 shares is offering an income potential of $336. In February, a strike 77.50 covered call offers $651 and in March, a strike 77.50 covered call offers $807 in premium.

The annualized return by writing covered calls in January is 49.74%, in February is 27.57% and in March is 20.03%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A January covered call on PM at strike $91.50 using 300 shares is offering an income potential of $258. In February, a strike 92.50 covered call offers $465 and in March, a strike 92.50 covered call offers $552 in premium.

The annualized return by writing covered calls in January is 28.92%, in February is 15.76% and in March is 11.04%.

Chart for PM

A January covered call on CVS at strike $82.00 using 300 shares is offering an income potential of $231. In February, a strike 85.00 covered call offers $261 and in March, a strike 85.00 covered call offers $417 in premium.

The annualized return by writing covered calls in January is 28.94%, in February is 9.82% and in March is 9.29%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A January covered call on GM at strike $36.50 using 300 shares is offering an income potential of $135. In February, a strike 37.00 covered call offers $282 and in March, a strike 37.00 covered call offers $357 in premium.

The annualized return by writing covered calls in January is 38.49%, in February is 24.46% and in March is 18.34%.

Chart for GM

A January covered call on HD at strike $135.00 using 300 shares is offering an income potential of $372. In February, a strike 135.00 covered call offers $837 and in March, a strike 135.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in January is 30.92%, in February is 19.85% and in March is 16.51%.

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 $399. In February, a strike 87.50 covered call offers $573 and in March, a strike 87.50 covered call offers $789 in premium.

The annualized return by writing covered calls in January is 52.01%, in February is 21.21% and in March is 17.15%.

Chart for JPM

A January covered call on MS at strike $43.00 using 300 shares is offering an income potential of $237. In February, a strike 43.00 covered call offers $420 and in March, a strike 43.00 covered call offers $552 in premium.

The annualized return by writing covered calls in January is 62.53%, in February is 31.72% and in March is 24.53%.

Chart for MS


Industrials Focus: Income Opportunities

A January covered call on BA at strike $160.00 using 300 shares is offering an income potential of $387. In February, a strike 160.00 covered call offers $1,065 and in March, a strike 160.00 covered call offers $1,335 in premium.

The annualized return by writing covered calls in January is 27.26%, in February is 21.47% and in March is 15.76%.

Chart for BA

A January covered call on DHR at strike $92.50 using 300 shares is offering an income potential of $3,000. In February, a strike 82.50 covered call offers $270 and in March, a strike 82.50 covered call offers $405 in premium.

The annualized return by writing covered calls in January is 430.89%, in February is 10.31% and in March is 9.14%.

Chart for DHR


Materials Focus: Income Opportunities

A January covered call on MON at strike $109.00 using 300 shares is offering an income potential of $84. In February, a strike 110.00 covered call offers $375 and in March, a strike 110.00 covered call offers $555 in premium.

The annualized return by writing covered calls in January is 8.55%, in February is 10.86% and in March is 9.41%.

Chart for MON

A January covered call on NEM at strike $35.50 using 300 shares is offering an income potential of $279. In February, a strike 36.00 covered call offers $498 and in March, a strike 36.00 covered call offers $678 in premium.

The annualized return by writing covered calls in January is 89.63%, in February is 46.10% and in March is 37.20%.

Chart for NEM


Utilities Focus: Income Opportunities

A January covered call on AEP at strike $62.50 using 300 shares is offering an income potential of $180. In February, a strike 62.50 covered call offers $360 and in May, a strike 62.50 covered call offers $660 in premium.

The annualized return by writing covered calls in January is 29.57%, in February is 17.92% and in May is 10.20%.

Chart for AEP

A January covered call on CNP at strike $25.00 using 300 shares is offering an income potential of $75. In February, a strike 25.00 covered call offers $150 and in May, a strike 25.00 covered call offers $360 in premium.

The annualized return by writing covered calls in January is 30.87%, in February is 18.71% and in May is 14.12%.

Chart for CNP


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 26.00 covered call offers $186 and in April, a strike 26.00 covered call offers $306 in premium.

The annualized return by writing covered calls in January is 32.45%, in February is 22.67% and in April is 14.72%.

Chart for VOD

A January covered call on VZ at strike $53.00 using 300 shares is offering an income potential of $114. In February, a strike 55.00 covered call offers $102 and in March, a strike 55.00 covered call offers $171 in premium.

The annualized return by writing covered calls in January is 22.10%, in February is 5.93% and in March is 5.87%.

Chart for VZ

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

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