Income Alerts Newsletter for 01/31/2017

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 $125.00 for February 24 2017 are offering a 1.00% return, which annualizes at a rate of 15.26%.

Chart for QQQ

The DIA options at strike $199.50 for February 24 2017 are offering a 0.85% return, which annualizes at a rate of 12.41%.

Chart for DIA

The SPY options at strike $228.00 for February 22 2017 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for SPY


Technology Focus: Income Opportunities

A February covered call on PCLN at strike $1612.50 using 300 shares is offering an income potential of $7,530. In March, a strike 1605.00 covered call offers $17,400 and in April, a strike 1610.00 covered call offers $20,670 in premium.

The annualized return by writing covered calls in February is 32.27%, in March is 29.80% and in April is 20.25%.

Chart for PCLN

A February covered call on AAPL at strike $122.00 using 300 shares is offering an income potential of $639. In March, a strike 125.00 covered call offers $468 and in April, a strike 125.00 covered call offers $723 in premium.

The annualized return by writing covered calls in February is 34.24%, in March is 10.09% and in April is 9.00%.

Chart for AAPL


Energy Focus: Income Opportunities

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

The annualized return by writing covered calls in June is 0.98%.

Chart for VLO


Healthcare Focus: Income Opportunities

A February covered call on HCA at strike $80.50 using 300 shares is offering an income potential of $480. In March, a strike 82.50 covered call offers $510 and in June, a strike 82.50 covered call offers $1,140 in premium.

The annualized return by writing covered calls in February is 41.76%, in March is 17.39% and in June is 13.41%.

Chart for HCA

A February covered call on MRK at strike $63.50 using 300 shares is offering an income potential of $141.

The annualized return by writing covered calls in February is 15.63%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A February covered call on PEP at strike $104.00 using 300 shares is offering an income potential of $336. In March, a strike 105.00 covered call offers $333 and in April, a strike 105.00 covered call offers $504 in premium.

The annualized return by writing covered calls in February is 20.98%, in March is 8.40% and in April is 7.33%.

Chart for PEP

A February covered call on PM at strike $96.00 using 300 shares is offering an income potential of $420. In March, a strike 97.50 covered call offers $414 and in June, a strike 97.50 covered call offers $795 in premium.

The annualized return by writing covered calls in February is 28.44%, in March is 11.33% and in June is 7.51%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A February covered call on CMCSA at strike $77.00 using 300 shares is offering an income potential of $174. In March, a strike 80.00 covered call offers $105 in premium.

The annualized return by writing covered calls in February is 15.73% and in March is 3.70%.

Chart for CMCSA

A June covered call on GM at strike $43.00 using 300 shares is offering an income potential of $126.

The annualized return by writing covered calls in June is 3.12%.

Chart for GM


Financials Focus: Income Opportunities

A February covered call on BAC at strike $23.00 using 300 shares is offering an income potential of $141. In March, a strike 23.00 covered call offers $225 and in April, a strike 23.00 covered call offers $318 in premium.

The annualized return by writing covered calls in February is 40.16%, in March is 26.24% and in April is 21.55%.

Chart for BAC

An April covered call on MS at strike $49.00 using 300 shares is offering an income potential of $96.

The annualized return by writing covered calls in April is 3.37%.

Chart for MS


Industrials Focus: Income Opportunities

A February covered call on BA at strike $167.50 using 300 shares is offering an income potential of $363. In March, a strike 170.00 covered call offers $516 and in April, a strike 170.00 covered call offers $894 in premium.

The annualized return by writing covered calls in February is 14.14%, in March is 8.15% and in April is 8.16%.

Chart for BA

A May covered call on UNP at strike $125.00 using 300 shares is offering an income potential of $180.

The annualized return by writing covered calls in May is 1.87%.

Chart for UNP


Materials Focus: Income Opportunities

A February covered call on PPG at strike $105.00 using 300 shares is offering an income potential of $90. In March, a strike 105.00 covered call offers $270 and in May, a strike 105.00 covered call offers $735 in premium.

The annualized return by writing covered calls in February is 5.67%, in March is 6.91% and in May is 8.16%.

Chart for PPG

A March covered call on MON at strike $110.00 using 300 shares is offering an income potential of $300.

The annualized return by writing covered calls in March is 7.22%.

Chart for MON


Utilities Focus: Income Opportunities

A February covered call on DUK at strike $77.50 using 300 shares is offering an income potential of $210. In March, a strike 77.50 covered call offers $315 and in April, a strike 77.50 covered call offers $450 in premium.

The annualized return by writing covered calls in February is 17.60%, in March is 10.72% and in April is 8.83%.

Chart for DUK

A May covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in May is 2.13%.

Chart for AEP


Telecommunications Focus: Income Opportunities

A February covered call on CTL at strike $26.00 using 300 shares is offering an income potential of $165. In March, a strike 26.00 covered call offers $225 and in April, a strike 26.00 covered call offers $240 in premium.

The annualized return by writing covered calls in February is 41.83%, in March is 23.24% and in April is 14.24%.

Chart for CTL

A March covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $870. In June, a strike 105.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in March is 22.69% and in June is 15.12%.

Chart for SBAC

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

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