Income Alerts Newsletter for 01/26/2017

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 $125.50 for February 18 2017 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for QQQ

The DIA options at strike $201.00 for February 18 2017 are offering a 0.67% return, which annualizes at a rate of 10.24%.

Chart for DIA

The SPY options at strike $230.00 for February 15 2017 are offering a 0.69% return, which annualizes at a rate of 12.05%.

Chart for SPY


Technology Focus: Income Opportunities

A February covered call on PCLN at strike $1740.00 using 300 shares is offering an income potential of $825. In March, a strike 1585.00 covered call offers $11,610 and in April, a strike 1605.00 covered call offers $13,020 in premium.

The annualized return by writing covered calls in February is 2.77%, in March is 17.98% and in April is 12.00%.

Chart for PCLN

A February covered call on BABA at strike $105.00 using 300 shares is offering an income potential of $591. In March, a strike 105.00 covered call offers $990 and in April, a strike 105.00 covered call offers $1,365 in premium.

The annualized return by writing covered calls in February is 29.35%, in March is 22.99% and in April is 19.18%.

Chart for BABA


Energy Focus: Income Opportunities

A February covered call on EOG at strike $104.00 using 300 shares is offering an income potential of $627. In March, a strike 105.00 covered call offers $945 and in April, a strike 105.00 covered call offers $1,305 in premium.

The annualized return by writing covered calls in February is 31.22%, in March is 21.95% and in April is 18.33%.

Chart for EOG

A February covered call on APC at strike $71.00 using 300 shares is offering an income potential of $528. In March, a strike 72.50 covered call offers $603 and in May, a strike 72.50 covered call offers $1,065 in premium.

The annualized return by writing covered calls in February is 38.84%, in March is 20.55% and in May is 16.79%.

Chart for APC


Healthcare Focus: Income Opportunities

A February covered call on HCA at strike $85.00 using 300 shares is offering an income potential of $165. In March, a strike 90.00 covered call offers $150 in premium.

The annualized return by writing covered calls in February is 10.91% and in March is 4.47%.

Chart for HCA

A February covered call on MCK at strike $170.00 using 300 shares is offering an income potential of $105. In March, a strike 190.00 covered call offers $570 and in May, a strike 155.00 covered call offers $2,220 in premium.

The annualized return by writing covered calls in February is 3.68%, in March is 9.11% and in May is 16.49%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A February covered call on KO at strike $42.50 using 300 shares is offering an income potential of $111. In March, a strike 43.00 covered call offers $99 and in April, a strike 43.00 covered call offers $156 in premium.

The annualized return by writing covered calls in February is 13.48%, in March is 5.54% and in April is 5.24%.

Chart for KO

A February covered call on PEP at strike $105.00 using 300 shares is offering an income potential of $357. In March, a strike 105.00 covered call offers $477 and in April, a strike 105.00 covered call offers $639 in premium.

The annualized return by writing covered calls in February is 17.50%, in March is 10.83% and in April is 8.72%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A February covered call on GM at strike $38.50 using 300 shares is offering an income potential of $294. In March, a strike 39.00 covered call offers $321 and in June, a strike 39.00 covered call offers $555 in premium.

The annualized return by writing covered calls in February is 39.96%, in March is 20.18% and in June is 12.96%.

Chart for GM

A February covered call on CBS at strike $64.00 using 300 shares is offering an income potential of $333. In March, a strike 65.00 covered call offers $369 and in June, a strike 65.00 covered call offers $873 in premium.

The annualized return by writing covered calls in February is 27.28%, in March is 13.98% and in June is 12.36%.

Chart for CBS


Financials Focus: Income Opportunities

An April covered call on GS at strike $340.00 using 300 shares is offering an income potential of $87.

The annualized return by writing covered calls in April is 0.52%.

Chart for GS


Industrials Focus: Income Opportunities

A February covered call on UPS at strike $117.00 using 300 shares is offering an income potential of $498. In March, a strike 120.00 covered call offers $273 and in April, a strike 120.00 covered call offers $462 in premium.

The annualized return by writing covered calls in February is 21.89%, in March is 5.50% and in April is 5.60%.

Chart for UPS

A February covered call on UNP at strike $111.00 using 300 shares is offering an income potential of $537. In March, a strike 115.00 covered call offers $354 and in May, a strike 115.00 covered call offers $900 in premium.

The annualized return by writing covered calls in February is 25.06%, in March is 7.58% and in May is 8.86%.

Chart for UNP


Materials Focus: Income Opportunities

A March covered call on NEM at strike $39.00 using 300 shares is offering an income potential of $378.

The annualized return by writing covered calls in March is 26.77%.

Chart for NEM

A February covered call on CF at strike $37.00 using 300 shares is offering an income potential of $405. In March, a strike 40.00 covered call offers $312 and in May, a strike 40.00 covered call offers $606 in premium.

The annualized return by writing covered calls in February is 58.34%, in March is 20.56% and in May is 18.57%.

Chart for CF


Utilities Focus: Income Opportunities

A February covered call on D at strike $77.50 using 300 shares is offering an income potential of $135. In March, a strike 77.50 covered call offers $225 and in April, a strike 77.50 covered call offers $315 in premium.

The annualized return by writing covered calls in February is 9.08%, in March is 7.01% and in April is 5.89%.

Chart for D

A May covered call on ED at strike $85.00 using 300 shares is offering an income potential of $75.

The annualized return by writing covered calls in May is 1.10%.

Chart for ED


Telecommunications Focus: Income Opportunities

A March covered call on SBAC at strike $125.00 using 300 shares is offering an income potential of $615. In June, a strike 115.00 covered call offers $870 in premium.

The annualized return by writing covered calls in March is 14.46% and in June is 7.41%.

Chart for SBAC

A February covered call on LVLT at strike $60.00 using 300 shares is offering an income potential of $360. In March, a strike 60.00 covered call offers $450 and in June, a strike 60.00 covered call offers $795 in premium.

The annualized return by writing covered calls in February is 31.47%, in March is 18.25% and in June is 11.96%.

Chart for LVLT

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

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