Income Alerts Newsletter for 02/24/2016

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 $102.00 for March 19 2016 are offering a 2.18% return, which annualizes at a rate of 31.87%.

Chart for QQQ

The DIA options at strike $164.50 for March 24 2016 are offering a 1.82% return, which annualizes at a rate of 22.19%.

Chart for DIA

The SPY options at strike $192.50 for March 24 2016 are offering a 1.92% return, which annualizes at a rate of 23.34%.

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 $150. In April, a strike 52.50 covered call offers $339 and in May, a strike 52.50 covered call offers $603 in premium.

The annualized return by writing covered calls in March is 14.62%, in April is 15.79% and in May is 17.22%.

Chart for QCOM

A March covered call on BABA at strike $67.50 using 300 shares is offering an income potential of $735. In April, a strike 67.50 covered call offers $1,080 and in July, a strike 67.50 covered call offers $1,860 in premium.

The annualized return by writing covered calls in March is 55.44%, in April is 39.12% and in July is 25.86%.

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 $246. In April, a strike 33.00 covered call offers $420 and in July, a strike 33.00 covered call offers $747 in premium.

The annualized return by writing covered calls in March is 38.29%, in April is 31.42% and in July is 21.32%.

Chart for HAL

A March covered call on OXY at strike $70.00 using 300 shares is offering an income potential of $450. In May, a strike 70.00 covered call offers $975 and in August, a strike 70.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in March is 32.44%, in May is 20.50% and in August is 14.23%.

Chart for OXY


Healthcare Focus: Income Opportunities

A March covered call on PFE at strike $30.00 using 300 shares is offering an income potential of $174. In April, a strike 30.00 covered call offers $267 and in May, a strike 30.00 covered call offers $357 in premium.

The annualized return by writing covered calls in March is 28.82%, in April is 21.08% and in May is 17.16%.

Chart for PFE

A March covered call on HCA at strike $70.00 using 300 shares is offering an income potential of $630. In June, a strike 70.00 covered call offers $1,440 and in September, a strike 70.00 covered call offers $1,980 in premium.

The annualized return by writing covered calls in March is 45.26%, in June is 23.22% and in September is 18.40%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A March covered call on WBA at strike $80.00 using 300 shares is offering an income potential of $435. In April, a strike 80.00 covered call offers $822 and in June, a strike 80.00 covered call offers $1,230 in premium.

The annualized return by writing covered calls in March is 27.39%, in April is 24.83% and in June is 17.29%.

Chart for WBA

A March covered call on CVS at strike $100.00 using 300 shares is offering an income potential of $204. In May, a strike 100.00 covered call offers $720 and in August, a strike 100.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in March is 10.33%, in May is 10.55% and in August is 8.79%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A March covered call on FOXA at strike $27.00 using 300 shares is offering an income potential of $195. In April, a strike 27.00 covered call offers $285 and in July, a strike 27.00 covered call offers $525 in premium.

The annualized return by writing covered calls in March is 36.08%, in April is 25.16% and in July is 17.60%.

Chart for FOXA

A March covered call on GM at strike $30.00 using 300 shares is offering an income potential of $138. In June, a strike 30.00 covered call offers $420 and in September, a strike 30.00 covered call offers $567 in premium.

The annualized return by writing covered calls in March is 23.22%, in June is 15.74% and in September is 12.12%.

Chart for GM


Financials Focus: Income Opportunities

A March covered call on AXP at strike $57.50 using 300 shares is offering an income potential of $111. In April, a strike 57.50 covered call offers $285 and in July, a strike 57.50 covered call offers $600 in premium.

The annualized return by writing covered calls in March is 9.87%, in April is 12.08% and in July is 9.55%.

Chart for AXP


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $80.00 using 300 shares is offering an income potential of $432. In May, a strike 80.00 covered call offers $1,005 and in August, a strike 80.00 covered call offers $1,455 in premium.

The annualized return by writing covered calls in March is 27.12%, in May is 18.38% and in August is 13.35%.

Chart for UNP

A March covered call on UTX at strike $92.50 using 300 shares is offering an income potential of $522. In May, a strike 92.50 covered call offers $1,020 and in August, a strike 92.50 covered call offers $1,365 in premium.

The annualized return by writing covered calls in March is 28.27%, in May is 15.99% and in August is 10.66%.

Chart for UTX


Materials Focus: Income Opportunities

A March covered call on CF at strike $35.00 using 300 shares is offering an income potential of $183. In May, a strike 35.00 covered call offers $552 and in August, a strike 35.00 covered call offers $870 in premium.

The annualized return by writing covered calls in March is 28.26%, in May is 25.20% and in August is 20.23%.

Chart for CF

A March covered call on FCX at strike $8.00 using 300 shares is offering an income potential of $105. In April, a strike 8.00 covered call offers $186 and in May, a strike 8.00 covered call offers $267 in premium.

The annualized return by writing covered calls in March is 74.17%, in April is 64.50% and in May is 58.13%.

Chart for FCX


Utilities Focus: Income Opportunities

A March covered call on DUK at strike $75.00 using 300 shares is offering an income potential of $375. In April, a strike 75.00 covered call offers $570 and in July, a strike 75.00 covered call offers $900 in premium.

The annualized return by writing covered calls in March is 24.84%, in April is 17.97% and in July is 10.60%.

Chart for DUK

A March covered call on ED at strike $72.50 using 300 shares is offering an income potential of $360. In May, a strike 72.50 covered call offers $675 and in August, a strike 72.50 covered call offers $900 in premium.

The annualized return by writing covered calls in March is 24.73%, in May is 13.37% and in August is 8.86%.

Chart for ED


Telecommunications Focus: Income Opportunities

A March covered call on CTL at strike $30.00 using 300 shares is offering an income potential of $120. In April, a strike 30.00 covered call offers $225 and in July, a strike 30.00 covered call offers $435 in premium.

The annualized return by writing covered calls in March is 20.24%, in April is 18.12% and in July is 13.22%.

Chart for CTL

A March covered call on LVLT at strike $49.00 using 300 shares is offering an income potential of $375. In June, a strike 49.00 covered call offers $1,050 and in September, a strike 49.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in March is 38.97%, in June is 24.70% and in September is 19.56%.

Chart for LVLT

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

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