Income Alerts Newsletter for 02/19/2016

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 $101.50 for March 11 2016 are offering a 2.39% return, which annualizes at a rate of 39.73%.

Chart for QQQ

The DIA options at strike $165.00 for March 11 2016 are offering a 1.42% return, which annualizes at a rate of 23.52%.

Chart for DIA

The SPY options at strike $192.50 for March 11 2016 are offering a 1.79% return, which annualizes at a rate of 29.72%.

Chart for SPY


Technology Focus: Income Opportunities

A March covered call on QCOM at strike $50.00 using 300 shares is offering an income potential of $318. In April, a strike 50.00 covered call offers $501 in premium.

The annualized return by writing covered calls in March is 26.86% and in April is 22.17%.

Chart for QCOM

A February covered call on BABA at strike $67.00 using 300 shares is offering an income potential of $120. In March, a strike 67.50 covered call offers $792 and in April, a strike 67.50 covered call offers $1,095 in premium.

The annualized return by writing covered calls in February is 110.41%, in March is 50.28% and in April is 36.54%.

Chart for BABA


Energy Focus: Income Opportunities

A February covered call on HAL at strike $31.50 using 300 shares is offering an income potential of $84. In March, a strike 32.00 covered call offers $330 and in April, a strike 32.00 covered call offers $495 in premium.

The annualized return by writing covered calls in February is 163.89%, in March is 44.08% and in April is 34.83%.

Chart for HAL

A February covered call on HES at strike $42.50 using 300 shares is offering an income potential of $102. In March, a strike 42.50 covered call offers $690 and in April, a strike 42.50 covered call offers $945 in premium.

The annualized return by writing covered calls in February is 148.69%, in March is 70.36% and in April is 50.93%.

Chart for HES


Healthcare Focus: Income Opportunities

A February covered call on GILD at strike $89.00 using 300 shares is offering an income potential of $189. In March, a strike 90.00 covered call offers $660 and in April, a strike 90.00 covered call offers $990 in premium.

The annualized return by writing covered calls in February is 130.12%, in March is 30.84% and in April is 24.24%.

Chart for GILD

A March covered call on MRK at strike $52.50 using 300 shares is offering an income potential of $81. In April, a strike 52.50 covered call offers $174 in premium.

The annualized return by writing covered calls in March is 6.56% and in April is 7.34%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A March covered call on ADM at strike $34.00 using 300 shares is offering an income potential of $321. In June, a strike 34.00 covered call offers $657 in premium.

The annualized return by writing covered calls in March is 39.65% and in June is 20.83%.

Chart for ADM

A February covered call on CVS at strike $97.00 using 300 shares is offering an income potential of $126. In March, a strike 100.00 covered call offers $279 and in May, a strike 100.00 covered call offers $822 in premium.

The annualized return by writing covered calls in February is 79.45%, in March is 11.79% and in May is 11.42%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A March covered call on GM at strike $30.00 using 300 shares is offering an income potential of $126. In June, a strike 30.00 covered call offers $396 in premium.

The annualized return by writing covered calls in March is 17.86% and in June is 14.37%.

Chart for GM

A February covered call on CBS at strike $46.00 using 300 shares is offering an income potential of $75. In March, a strike 47.50 covered call offers $264 and in June, a strike 47.50 covered call offers $738 in premium.

The annualized return by writing covered calls in February is 100.19%, in March is 23.84% and in June is 17.13%.

Chart for CBS


Financials Focus: Income Opportunities

A February covered call on JPM at strike $58.00 using 300 shares is offering an income potential of $90. In March, a strike 60.00 covered call offers $282 and in April, a strike 60.00 covered call offers $441 in premium.

The annualized return by writing covered calls in February is 95.20%, in March is 20.11% and in April is 16.42%.

Chart for JPM


Industrials Focus: Income Opportunities

A February covered call on UNP at strike $79.00 using 300 shares is offering an income potential of $108. In March, a strike 80.00 covered call offers $465 and in May, a strike 80.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in February is 83.91%, in March is 24.46% and in May is 18.28%.

Chart for UNP

A February covered call on UTX at strike $88.50 using 300 shares is offering an income potential of $96. In March, a strike 90.00 covered call offers $378 and in May, a strike 90.00 covered call offers $882 in premium.

The annualized return by writing covered calls in February is 66.33%, in March is 17.60% and in May is 13.51%.

Chart for UTX


Materials Focus: Income Opportunities

A February covered call on CF at strike $34.50 using 300 shares is offering an income potential of $105. In March, a strike 35.00 covered call offers $501 and in May, a strike 35.00 covered call offers $915 in premium.

The annualized return by writing covered calls in February is 187.76%, in March is 62.14% and in May is 38.22%.

Chart for CF

A March covered call on NEM at strike $26.00 using 300 shares is offering an income potential of $330. In April, a strike 26.00 covered call offers $507 in premium.

The annualized return by writing covered calls in March is 55.83% and in April is 45.49%.

Chart for NEM


Utilities Focus: Income Opportunities

A March covered call on CNP at strike $19.00 using 300 shares is offering an income potential of $120. In May, a strike 19.00 covered call offers $225 in premium.

The annualized return by writing covered calls in March is 26.80% and in May is 16.53%.

Chart for CNP

A March covered call on D at strike $70.00 using 300 shares is offering an income potential of $300. In April, a strike 70.00 covered call offers $450 in premium.

The annualized return by writing covered calls in March is 17.70% and in April is 13.83%.

Chart for D


Telecommunications Focus: Income Opportunities

A March covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $180. In April, a strike 31.00 covered call offers $270 in premium.

The annualized return by writing covered calls in March is 24.56% and in April is 19.25%.

Chart for CTL

A March covered call on VOD at strike $31.00 using 300 shares is offering an income potential of $252. In April, a strike 31.00 covered call offers $357 in premium.

The annualized return by writing covered calls in March is 33.93% and in April is 25.16%.

Chart for VOD

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

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