Income Alerts Newsletter for 02/25/2016

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 $103.00 for March 19 2016 are offering a 2.14% return, which annualizes at a rate of 32.57%.

Chart for QQQ

The DIA options at strike $165.00 for March 19 2016 are offering a 1.75% return, which annualizes at a rate of 26.59%.

Chart for DIA

The SPY options at strike $193.50 for March 24 2016 are offering a 2.01% return, which annualizes at a rate of 25.32%.

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 $243. In April, a strike 52.50 covered call offers $468 and in May, a strike 52.50 covered call offers $750 in premium.

The annualized return by writing covered calls in March is 24.29%, in April is 21.92% and in May is 21.40%.

Chart for QCOM

A March covered call on BABA at strike $67.50 using 300 shares is offering an income potential of $768. In April, a strike 67.50 covered call offers $1,125 and in July, a strike 67.50 covered call offers $1,890 in premium.

The annualized return by writing covered calls in March is 60.20%, in April is 41.47% and in July is 26.39%.

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 $288. In April, a strike 33.00 covered call offers $465 and in July, a strike 33.00 covered call offers $801 in premium.

The annualized return by writing covered calls in March is 46.35%, in April is 35.20% and in July is 22.88%.

Chart for HAL

A March covered call on OXY at strike $70.00 using 300 shares is offering an income potential of $516. In May, a strike 70.00 covered call offers $1,050 and in August, a strike 70.00 covered call offers $1,410 in premium.

The annualized return by writing covered calls in March is 38.61%, in May is 22.26% and in August is 14.88%.

Chart for OXY


Healthcare Focus: Income Opportunities

A March covered call on GILD at strike $90.00 using 300 shares is offering an income potential of $612. In April, a strike 90.00 covered call offers $960 and in May, a strike 90.00 covered call offers $1,380 in premium.

The annualized return by writing covered calls in March is 35.53%, in April is 26.07% and in May is 22.77%.

Chart for GILD

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 10.68% and in May is 10.75%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A March covered call on WBA at strike $80.00 using 300 shares is offering an income potential of $525. In April, a strike 80.00 covered call offers $930 and in June, a strike 80.00 covered call offers $1,320 in premium.

The annualized return by writing covered calls in March is 34.26%, in April is 28.51% and in June is 18.61%.

Chart for WBA

A March covered call on CVS at strike $100.00 using 300 shares is offering an income potential of $207. In May, a strike 100.00 covered call offers $732 and in August, a strike 100.00 covered call offers $1,215 in premium.

The annualized return by writing covered calls in March is 10.91%, in May is 10.84% and in August is 8.95%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A March covered call on FOXA at strike $28.00 using 300 shares is offering an income potential of $105. In April, a strike 28.00 covered call offers $195 and in July, a strike 28.00 covered call offers $405 in premium.

The annualized return by writing covered calls in March is 19.74%, in April is 17.11% and in July is 13.27%.

Chart for FOXA

A March covered call on CBS at strike $47.50 using 300 shares is offering an income potential of $441. In June, a strike 47.50 covered call offers $930 and in September, a strike 47.50 covered call offers $1,275 in premium.

The annualized return by writing covered calls in March is 48.59%, in June is 22.17% and in September is 17.42%.

Chart for CBS


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $82.50 using 300 shares is offering an income potential of $267. In May, a strike 82.50 covered call offers $831 and in August, a strike 82.50 covered call offers $1,275 in premium.

The annualized return by writing covered calls in March is 17.09%, in May is 15.03% and in August is 11.49%.

Chart for UNP

A March covered call on UTX at strike $95.00 using 300 shares is offering an income potential of $543. In May, a strike 95.00 covered call offers $1,005 and in August, a strike 95.00 covered call offers $1,380 in premium.

The annualized return by writing covered calls in March is 29.99%, in May is 15.57% and in August is 10.60%.

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 $144. In May, a strike 35.00 covered call offers $513 and in August, a strike 35.00 covered call offers $813 in premium.

The annualized return by writing covered calls in March is 23.35%, in May is 23.88% and in August is 19.14%.

Chart for CF

A March covered call on FCX at strike $8.00 using 300 shares is offering an income potential of $102. In April, a strike 8.00 covered call offers $192 and in May, a strike 8.00 covered call offers $267 in premium.

The annualized return by writing covered calls in March is 75.38%, in April is 68.48% and in May is 59.17%.

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 $420. In April, a strike 75.00 covered call offers $615 and in July, a strike 75.00 covered call offers $930 in premium.

The annualized return by writing covered calls in March is 28.95%, in April is 19.74% and in July is 11.01%.

Chart for DUK

A March covered call on ED at strike $72.50 using 300 shares is offering an income potential of $285. In May, a strike 72.50 covered call offers $615 and in August, a strike 72.50 covered call offers $840 in premium.

The annualized return by writing covered calls in March is 20.46%, in May is 12.37% and in August is 8.35%.

Chart for ED


Telecommunications Focus: Income Opportunities

A March covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $90. In April, a strike 31.00 covered call offers $195 and in July, a strike 31.00 covered call offers $405 in premium.

The annualized return by writing covered calls in March is 15.36%, in April is 15.54% and in July is 12.02%.

Chart for CTL

A March covered call on LVLT at strike $49.00 using 300 shares is offering an income potential of $435. In June, a strike 49.00 covered call offers $1,080 and in September, a strike 49.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in March is 46.71%, in June is 25.36% and in September is 19.39%.

Chart for LVLT

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

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