Income Alerts Newsletter for 02/26/2016

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 $104.00 for March 19 2016 are offering a 1.83% return, which annualizes at a rate of 29.02%.

Chart for QQQ

The DIA options at strike $167.00 for March 19 2016 are offering a 1.53% return, which annualizes at a rate of 24.24%.

Chart for DIA

The SPY options at strike $196.00 for March 19 2016 are offering a 1.49% return, which annualizes at a rate of 23.72%.

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 $237. In April, a strike 52.50 covered call offers $444 and in May, a strike 52.50 covered call offers $741 in premium.

The annualized return by writing covered calls in March is 24.65%, in April is 21.12% and in May is 21.32%.

Chart for QCOM

A March covered call on BABA at strike $67.50 using 300 shares is offering an income potential of $639. In April, a strike 67.50 covered call offers $990 and in July, a strike 67.50 covered call offers $1,770 in premium.

The annualized return by writing covered calls in March is 52.38%, in April is 37.28% and in July is 24.96%.

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 $279. In April, a strike 33.00 covered call offers $456 and in July, a strike 33.00 covered call offers $798 in premium.

The annualized return by writing covered calls in March is 46.75%, in April is 35.11% and in July is 22.91%.

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 $92.50 using 300 shares is offering an income potential of $357. In April, a strike 92.50 covered call offers $705 and in May, a strike 92.50 covered call offers $1,125 in premium.

The annualized return by writing covered calls in March is 21.23%, in April is 19.16% and in May is 18.42%.

Chart for GILD

A March covered call on PFE at strike $31.00 using 300 shares is offering an income potential of $114. In April, a strike 31.00 covered call offers $204 and in May, a strike 31.00 covered call offers $300 in premium.

The annualized return by writing covered calls in March is 19.96%, in April is 16.27% and in May is 14.34%.

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 $573. In April, a strike 80.00 covered call offers $975 and in June, a strike 80.00 covered call offers $1,380 in premium.

The annualized return by writing covered calls in March is 38.86%, in April is 30.34% and in June is 19.55%.

Chart for WBA

A March covered call on CVS at strike $100.00 using 300 shares is offering an income potential of $324. In May, a strike 100.00 covered call offers $894 and in August, a strike 100.00 covered call offers $1,410 in premium.

The annualized return by writing covered calls in March is 17.61%, in May is 13.25% and in August is 10.34%.

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 $90. In April, a strike 28.00 covered call offers $195 and in July, a strike 28.00 covered call offers $435 in premium.

The annualized return by writing covered calls in March is 17.58%, in April is 17.40% and in July is 14.37%.

Chart for FOXA

A March covered call on GM at strike $30.00 using 300 shares is offering an income potential of $135. In June, a strike 30.00 covered call offers $426 and in September, a strike 30.00 covered call offers $576 in premium.

The annualized return by writing covered calls in March is 24.64%, in June is 16.23% and in September is 12.42%.

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 $123. In April, a strike 57.50 covered call offers $294 and in July, a strike 57.50 covered call offers $687 in premium.

The annualized return by writing covered calls in March is 11.83%, in April is 12.89% and in July is 11.09%.

Chart for AXP

A March covered call on MS at strike $25.00 using 300 shares is offering an income potential of $219. In April, a strike 25.00 covered call offers $342 and in May, a strike 25.00 covered call offers $447 in premium.

The annualized return by writing covered calls in March is 48.47%, in April is 34.73% and in May is 27.33%.

Chart for MS


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $80.00 using 300 shares is offering an income potential of $507. In May, a strike 80.00 covered call offers $1,125 and in August, a strike 80.00 covered call offers $1,575 in premium.

The annualized return by writing covered calls in March is 34.55%, in May is 21.06% and in August is 14.62%.

Chart for UNP

A March covered call on UTX at strike $100.00 using 300 shares is offering an income potential of $564. In May, a strike 100.00 covered call offers $1,020 and in August, a strike 100.00 covered call offers $1,305 in premium.

The annualized return by writing covered calls in March is 31.02%, in May is 15.24% and in August is 9.57%.

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 $237. In May, a strike 35.00 covered call offers $639 and in August, a strike 35.00 covered call offers $975 in premium.

The annualized return by writing covered calls in March is 38.73%, in May is 29.13% and in August is 22.41%.

Chart for CF

A March covered call on FCX at strike $8.00 using 300 shares is offering an income potential of $90. In April, a strike 8.00 covered call offers $174 and in May, a strike 8.00 covered call offers $258 in premium.

The annualized return by writing covered calls in March is 69.81%, in April is 63.47% and in May is 58.31%.

Chart for FCX


Utilities Focus: Income Opportunities

A March covered call on DUK at strike $77.50 using 300 shares is offering an income potential of $255. In April, a strike 77.50 covered call offers $480 and in July, a strike 77.50 covered call offers $780 in premium.

The annualized return by writing covered calls in March is 17.85%, in April is 15.30% and in July is 9.05%.

Chart for DUK

A March covered call on ED at strike $72.50 using 300 shares is offering an income potential of $390. In May, a strike 72.50 covered call offers $720 and in August, a strike 72.50 covered call offers $960 in premium.

The annualized return by writing covered calls in March is 29.00%, in May is 14.54% and in August is 9.53%.

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 $120. In April, a strike 31.00 covered call offers $240 and in July, a strike 31.00 covered call offers $465 in premium.

The annualized return by writing covered calls in March is 21.16%, in April is 19.34% and in July is 13.81%.

Chart for CTL

A March covered call on VOD at strike $31.00 using 300 shares is offering an income potential of $162. In April, a strike 31.00 covered call offers $267 and in July, a strike 31.00 covered call offers $429 in premium.

The annualized return by writing covered calls in March is 28.44%, in April is 21.39% and in July is 12.57%.

Chart for VOD

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

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.