Income Alerts Newsletter for 02/23/2016

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 $103.50 for March 24 2016 are offering a 2.16% return, which annualizes at a rate of 25.39%.

Chart for QQQ

The DIA options at strike $166.00 for March 19 2016 are offering a 1.53% return, which annualizes at a rate of 21.47%.

Chart for DIA

The SPY options at strike $195.00 for March 19 2016 are offering a 1.51% return, which annualizes at a rate of 21.22%.

Chart for SPY


Technology Focus: Income Opportunities

A March covered call on QCOM at strike $52.50 using 300 shares is offering an income potential of $225. In April, a strike 52.50 covered call offers $420 and in May, a strike 52.50 covered call offers $696 in premium.

The annualized return by writing covered calls in March is 20.84%, in April is 18.97% and in May is 19.43%.

Chart for QCOM

A March covered call on BABA at strike $70.00 using 300 shares is offering an income potential of $651. In April, a strike 70.00 covered call offers $975 and in July, a strike 70.00 covered call offers $1,800 in premium.

The annualized return by writing covered calls in March is 45.69%, in April is 33.49% and in July is 24.03%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on HAL at strike $33.00 using 300 shares is offering an income potential of $354. In April, a strike 33.00 covered call offers $525 and in July, a strike 33.00 covered call offers $840 in premium.

The annualized return by writing covered calls in March is 52.26%, in April is 38.00% and in July is 23.43%.

Chart for HAL

A March covered call on HES at strike $45.00 using 300 shares is offering an income potential of $600. In April, a strike 45.00 covered call offers $843 and in May, a strike 45.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in March is 65.94%, in April is 45.47% and in May is 38.22%.

Chart for HES


Healthcare Focus: Income Opportunities

An April covered call on PFE at strike $31.00 using 300 shares is offering an income potential of $135. In May, a strike 31.00 covered call offers $225 in premium.

The annualized return by writing covered calls in April is 10.28% and in May is 10.50%.

Chart for PFE

A March covered call on GILD at strike $90.00 using 300 shares is offering an income potential of $552. In April, a strike 90.00 covered call offers $870 and in May, a strike 90.00 covered call offers $1,275 in premium.

The annualized return by writing covered calls in March is 29.60%, in April is 22.74% and in May is 20.54%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A March covered call on WBA at strike $80.00 using 300 shares is offering an income potential of $447. In April, a strike 80.00 covered call offers $819 and in June, a strike 80.00 covered call offers $1,230 in premium.

The annualized return by writing covered calls in March is 27.06%, in April is 24.26% and in June is 17.12%.

Chart for WBA

A March covered call on ADM at strike $34.00 using 300 shares is offering an income potential of $282. In June, a strike 34.00 covered call offers $615 and in September, a strike 34.00 covered call offers $816 in premium.

The annualized return by writing covered calls in March is 40.17%, in June is 20.15% and in September is 15.36%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A March covered call on GM at strike $30.00 using 300 shares is offering an income potential of $156. In June, a strike 30.00 covered call offers $447 and in September, a strike 30.00 covered call offers $567 in premium.

The annualized return by writing covered calls in March is 25.08%, in June is 16.52% and in September is 11.96%.

Chart for GM

A March covered call on CBS at strike $47.50 using 300 shares is offering an income potential of $330. In June, a strike 47.50 covered call offers $828 and in September, a strike 47.50 covered call offers $1,155 in premium.

The annualized return by writing covered calls in March is 33.74%, in June is 19.52% and in September is 15.70%.

Chart for CBS


Financials Focus: Income Opportunities

A March covered call on AXP at strike $57.50 using 300 shares is offering an income potential of $153. In April, a strike 57.50 covered call offers $333 and in July, a strike 57.50 covered call offers $717 in premium.

The annualized return by writing covered calls in March is 13.01%, in April is 13.78% and in July is 11.32%.

Chart for AXP

A March covered call on MS at strike $25.00 using 300 shares is offering an income potential of $201. In April, a strike 25.00 covered call offers $318 and in May, a strike 25.00 covered call offers $426 in premium.

The annualized return by writing covered calls in March is 39.40%, in April is 30.51% and in May is 25.19%.

Chart for MS


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $82.50 using 300 shares is offering an income potential of $429. In May, a strike 82.50 covered call offers $1,035 and in August, a strike 82.50 covered call offers $1,485 in premium.

The annualized return by writing covered calls in March is 25.04%, in May is 18.10% and in August is 13.09%.

Chart for UNP

A March covered call on HTZ at strike $9.00 using 300 shares is offering an income potential of $180. In June, a strike 9.00 covered call offers $360 and in September, a strike 9.00 covered call offers $480 in premium.

The annualized return by writing covered calls in March is 102.35%, in June is 49.06% and in September is 38.83%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on CF at strike $35.00 using 300 shares is offering an income potential of $315. In May, a strike 35.00 covered call offers $759 and in August, a strike 35.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in March is 45.37%, in May is 33.46% and in August is 23.63%.

Chart for CF

A March covered call on NEM at strike $26.00 using 300 shares is offering an income potential of $297. In April, a strike 26.00 covered call offers $444 and in June, a strike 26.00 covered call offers $717 in premium.

The annualized return by writing covered calls in March is 57.60%, in April is 42.32% and in June is 32.80%.

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 $105. In May, a strike 19.00 covered call offers $210 and in August, a strike 19.00 covered call offers $285 in premium.

The annualized return by writing covered calls in March is 26.86%, in May is 16.00% and in August is 10.89%.

Chart for CNP

A March covered call on D at strike $72.50 using 300 shares is offering an income potential of $90. In April, a strike 72.50 covered call offers $210 and in July, a strike 72.50 covered call offers $450 in premium.

The annualized return by writing covered calls in March is 5.98%, in April is 6.76% and in July is 5.45%.

Chart for D


Telecommunications Focus: Income Opportunities

A March covered call on CTL at strike $30.00 using 300 shares is offering an income potential of $195. In April, a strike 30.00 covered call offers $300 and in July, a strike 30.00 covered call offers $510 in premium.

The annualized return by writing covered calls in March is 31.10%, in April is 23.32% and in July is 15.13%.

Chart for CTL

A March covered call on SBAC at strike $95.00 using 300 shares is offering an income potential of $765. In June, a strike 95.00 covered call offers $1,650 and in September, a strike 95.00 covered call offers $2,250 in premium.

The annualized return by writing covered calls in March is 39.57%, in June is 19.60% and in September is 15.39%.

Chart for SBAC

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

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