Income Alerts Newsletter for 02/02/2016

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 $104.50 for February 26 2016 are offering a 2.37% return, which annualizes at a rate of 34.64%.

Chart for QQQ

The DIA options at strike $164.50 for February 26 2016 are offering a 1.51% return, which annualizes at a rate of 22.10%.

Chart for DIA

The SPY options at strike $194.00 for February 26 2016 are offering a 1.77% return, which annualizes at a rate of 25.78%.

Chart for SPY


Technology Focus: Income Opportunities

A February covered call on GOOG at strike $752.50 using 300 shares is offering an income potential of $8,400. In March, a strike 755.00 covered call offers $9,900 and in April, a strike 755.00 covered call offers $11,700 in premium.

The annualized return by writing covered calls in February is 74.29%, in March is 35.64% and in April is 26.62%.

Chart for GOOG

A February covered call on FB at strike $116.00 using 300 shares is offering an income potential of $774. In March, a strike 120.00 covered call offers $813 and in April, a strike 120.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in February is 44.05%, in March is 18.73% and in April is 16.84%.

Chart for FB


Energy Focus: Income Opportunities

A February covered call on APC at strike $38.50 using 300 shares is offering an income potential of $714. In March, a strike 40.00 covered call offers $780 and in May, a strike 40.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in February is 127.46%, in March is 56.64% and in May is 36.60%.

Chart for APC

A February covered call on HAL at strike $32.00 using 300 shares is offering an income potential of $276. In March, a strike 32.00 covered call offers $459 and in April, a strike 32.00 covered call offers $588 in premium.

The annualized return by writing covered calls in February is 57.57%, in March is 39.49% and in April is 32.16%.

Chart for HAL


Healthcare Focus: Income Opportunities

A February covered call on HCA at strike $71.50 using 300 shares is offering an income potential of $510. In March, a strike 72.50 covered call offers $720 and in June, a strike 72.50 covered call offers $1,440 in premium.

The annualized return by writing covered calls in February is 47.11%, in March is 27.16% and in June is 19.17%.

Chart for HCA

A February covered call on JNJ at strike $105.00 using 300 shares is offering an income potential of $378. In March, a strike 105.00 covered call offers $567 and in April, a strike 105.00 covered call offers $768 in premium.

The annualized return by writing covered calls in February is 23.48%, in March is 14.32% and in April is 12.24%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

A February covered call on ADM at strike $35.50 using 300 shares is offering an income potential of $348. In March, a strike 36.00 covered call offers $369 and in June, a strike 36.00 covered call offers $600 in premium.

The annualized return by writing covered calls in February is 64.97%, in March is 27.91% and in June is 15.81%.

Chart for ADM

A February covered call on CVS at strike $97.50 using 300 shares is offering an income potential of $597. In March, a strike 100.00 covered call offers $543 and in May, a strike 100.00 covered call offers $975 in premium.

The annualized return by writing covered calls in February is 40.10%, in March is 14.72% and in May is 11.46%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A February covered call on CMCSA at strike $56.00 using 300 shares is offering an income potential of $378. In March, a strike 57.50 covered call offers $336 and in April, a strike 57.50 covered call offers $441 in premium.

The annualized return by writing covered calls in February is 44.37%, in March is 15.90% and in April is 13.17%.

Chart for CMCSA

A February covered call on FOXA at strike $27.00 using 300 shares is offering an income potential of $225. In March, a strike 27.00 covered call offers $315 and in April, a strike 27.00 covered call offers $375 in premium.

The annualized return by writing covered calls in February is 54.95%, in March is 31.46% and in April is 23.65%.

Chart for FOXA


Financials Focus: Income Opportunities

A February covered call on MET at strike $44.50 using 300 shares is offering an income potential of $246. In March, a strike 45.00 covered call offers $351 and in April, a strike 45.00 covered call offers $489 in premium.

The annualized return by writing covered calls in February is 36.25%, in March is 21.08% and in April is 18.60%.

Chart for MET

A February covered call on JPM at strike $59.00 using 300 shares is offering an income potential of $372. In March, a strike 60.00 covered call offers $468 and in April, a strike 60.00 covered call offers $600 in premium.

The annualized return by writing covered calls in February is 41.34%, in March is 21.14% and in April is 17.12%.

Chart for JPM


Industrials Focus: Income Opportunities

A February covered call on UNP at strike $73.50 using 300 shares is offering an income potential of $435. In March, a strike 75.00 covered call offers $456 and in May, a strike 75.00 covered call offers $915 in premium.

The annualized return by writing covered calls in February is 38.88%, in March is 16.49% and in May is 14.45%.

Chart for UNP

A February covered call on UPS at strike $94.50 using 300 shares is offering an income potential of $483. In March, a strike 95.00 covered call offers $618 and in April, a strike 95.00 covered call offers $822 in premium.

The annualized return by writing covered calls in February is 33.45%, in March is 17.39% and in April is 14.60%.

Chart for UPS


Materials Focus: Income Opportunities

A February covered call on NEM at strike $21.00 using 300 shares is offering an income potential of $213. In March, a strike 21.00 covered call offers $384 and in April, a strike 21.00 covered call offers $477 in premium.

The annualized return by writing covered calls in February is 68.75%, in March is 51.58% and in April is 40.81%.

Chart for NEM

A February covered call on PPG at strike $100.00 using 300 shares is offering an income potential of $75. In March, a strike 100.00 covered call offers $360 and in May, a strike 100.00 covered call offers $780 in premium.

The annualized return by writing covered calls in February is 5.04%, in March is 9.87% and in May is 9.28%.

Chart for PPG


Utilities Focus: Income Opportunities

A May covered call on AES at strike $10.00 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in May is 14.65%.

Chart for AES

A February covered call on CNP at strike $19.00 using 300 shares is offering an income potential of $75. In March, a strike 19.00 covered call offers $150 and in May, a strike 19.00 covered call offers $225 in premium.

The annualized return by writing covered calls in February is 26.14%, in March is 21.43% and in May is 13.93%.

Chart for CNP


Telecommunications Focus: Income Opportunities

A February covered call on CTL at strike $26.00 using 300 shares is offering an income potential of $210. In March, a strike 26.00 covered call offers $270 and in April, a strike 26.00 covered call offers $330 in premium.

The annualized return by writing covered calls in February is 53.36%, in March is 27.96% and in April is 21.59%.

Chart for CTL

A February covered call on VZ at strike $51.00 using 300 shares is offering an income potential of $192. In March, a strike 52.50 covered call offers $153 and in April, a strike 52.50 covered call offers $204 in premium.

The annualized return by writing covered calls in February is 24.53%, in March is 7.88% and in April is 6.61%.

Chart for VZ

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

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