Income Alerts Newsletter for 02/07/2017

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 $126.00 for March 3 2017 are offering a 0.95% return, which annualizes at a rate of 14.40%.

Chart for QQQ

The DIA options at strike $201.00 for March 3 2017 are offering a 0.55% return, which annualizes at a rate of 8.06%.

Chart for DIA

The SPY options at strike $229.00 for March 1 2017 are offering a 0.81% return, which annualizes at a rate of 13.44%.

Chart for SPY


Technology Focus: Income Opportunities

A February covered call on BABA at strike $101.00 using 300 shares is offering an income potential of $435. In March, a strike 105.00 covered call offers $420 and in April, a strike 105.00 covered call offers $750 in premium.

The annualized return by writing covered calls in February is 44.35%, in March is 12.84% and in April is 12.36%.

Chart for BABA

A February covered call on FB at strike $133.00 using 300 shares is offering an income potential of $408. In March, a strike 135.00 covered call offers $687 and in April, a strike 135.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in February is 31.65%, in March is 16.52% and in April is 14.22%.

Chart for FB


Energy Focus: Income Opportunities

A February covered call on HAL at strike $56.50 using 300 shares is offering an income potential of $210. In March, a strike 57.50 covered call offers $324 and in April, a strike 57.50 covered call offers $567 in premium.

The annualized return by writing covered calls in February is 38.43%, in March is 17.91% and in April is 16.97%.

Chart for HAL

A February covered call on APC at strike $69.50 using 300 shares is offering an income potential of $327. In March, a strike 70.00 covered call offers $597 and in May, a strike 70.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in February is 48.75%, in March is 27.06% and in May is 20.33%.

Chart for APC


Healthcare Focus: Income Opportunities

A March covered call on PFE at strike $33.00 using 300 shares is offering an income potential of $81. In April, a strike 33.00 covered call offers $153 in premium.

The annualized return by writing covered calls in March is 7.71% and in April is 7.82%.

Chart for PFE

A February covered call on GILD at strike $72.50 using 300 shares is offering an income potential of $522. In March, a strike 72.50 covered call offers $675 and in April, a strike 72.50 covered call offers $840 in premium.

The annualized return by writing covered calls in February is 74.91%, in March is 29.27% and in April is 19.58%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A February covered call on KO at strike $42.00 using 300 shares is offering an income potential of $87. In March, a strike 42.00 covered call offers $144 and in April, a strike 42.00 covered call offers $207 in premium.

The annualized return by writing covered calls in February is 21.37%, in March is 10.66% and in April is 8.22%.

Chart for KO

A February covered call on PEP at strike $105.00 using 300 shares is offering an income potential of $279. In March, a strike 105.00 covered call offers $405 and in April, a strike 105.00 covered call offers $600 in premium.

The annualized return by writing covered calls in February is 27.29%, in March is 11.93% and in April is 9.49%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A February covered call on GM at strike $37.00 using 300 shares is offering an income potential of $201. In March, a strike 37.00 covered call offers $306 and in June, a strike 37.00 covered call offers $579 in premium.

The annualized return by writing covered calls in February is 61.48%, in March is 26.66% and in June is 15.53%.

Chart for GM

A February covered call on HD at strike $137.00 using 300 shares is offering an income potential of $318. In March, a strike 140.00 covered call offers $435 and in April, a strike 140.00 covered call offers $672 in premium.

The annualized return by writing covered calls in February is 25.97%, in March is 10.05% and in April is 8.23%.

Chart for HD


Financials Focus: Income Opportunities

A February covered call on MS at strike $45.00 using 300 shares is offering an income potential of $165. In March, a strike 45.00 covered call offers $393 and in April, a strike 45.00 covered call offers $573 in premium.

The annualized return by writing covered calls in February is 41.40%, in March is 28.30% and in April is 22.05%.

Chart for MS

A February covered call on WFC at strike $57.00 using 300 shares is offering an income potential of $156. In March, a strike 57.50 covered call offers $306 and in April, a strike 57.50 covered call offers $513 in premium.

The annualized return by writing covered calls in February is 30.80%, in March is 17.19% and in April is 15.38%.

Chart for WFC


Industrials Focus: Income Opportunities

A February covered call on UTX at strike $111.00 using 300 shares is offering an income potential of $231. In March, a strike 115.00 covered call offers $120 and in May, a strike 115.00 covered call offers $435 in premium.

The annualized return by writing covered calls in February is 21.31%, in March is 3.31% and in May is 4.70%.

Chart for UTX

A February covered call on BA at strike $165.00 using 300 shares is offering an income potential of $267. In March, a strike 165.00 covered call offers $777 and in April, a strike 165.00 covered call offers $1,245 in premium.

The annualized return by writing covered calls in February is 18.11%, in March is 15.02% and in April is 12.81%.

Chart for BA


Materials Focus: Income Opportunities

A February covered call on MON at strike $109.00 using 300 shares is offering an income potential of $156. In March, a strike 110.00 covered call offers $180 and in April, a strike 110.00 covered call offers $375 in premium.

The annualized return by writing covered calls in February is 16.01%, in March is 5.21% and in April is 5.76%.

Chart for MON

A February covered call on PPG at strike $100.00 using 300 shares is offering an income potential of $300. In March, a strike 100.00 covered call offers $795 and in May, a strike 100.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in February is 30.75%, in March is 24.86% and in May is 13.24%.

Chart for PPG


Utilities Focus: Income Opportunities

A May covered call on CNP at strike $27.00 using 300 shares is offering an income potential of $165.

The annualized return by writing covered calls in May is 7.71%.

Chart for CNP

A March covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $90. In April, a strike 80.00 covered call offers $210 in premium.

The annualized return by writing covered calls in March is 3.63% and in April is 4.43%.

Chart for DUK


Telecommunications Focus: Income Opportunities

A March covered call on T at strike $42.00 using 300 shares is offering an income potential of $111. In April, a strike 42.00 covered call offers $168 in premium.

The annualized return by writing covered calls in March is 8.51% and in April is 6.82%.

Chart for T

A March covered call on CTL at strike $26.00 using 300 shares is offering an income potential of $105. In April, a strike 26.00 covered call offers $135 in premium.

The annualized return by writing covered calls in March is 13.26% and in April is 9.02%.

Chart for CTL

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

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