Income Alerts Newsletter for 03/01/2016

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 24 2016 are offering a 1.94% return, which annualizes at a rate of 29.49%.

Chart for QQQ

The DIA options at strike $165.50 for March 24 2016 are offering a 1.72% return, which annualizes at a rate of 26.10%.

Chart for DIA

The SPY options at strike $193.50 for March 24 2016 are offering a 1.80% return, which annualizes at a rate of 27.30%.

Chart for SPY


Technology Focus: Income Opportunities

A March covered call on QCOM at strike $51.00 using 300 shares is offering an income potential of $375. In April, a strike 52.50 covered call offers $387 and in May, a strike 52.50 covered call offers $684 in premium.

The annualized return by writing covered calls in March is 44.32%, in April is 20.11% and in May is 20.79%.

Chart for QCOM

A March covered call on BABA at strike $69.50 using 300 shares is offering an income potential of $708. In April, a strike 70.00 covered call offers $975 and in July, a strike 70.00 covered call offers $1,785 in premium.

The annualized return by writing covered calls in March is 67.58%, in April is 38.13% and in July is 24.78%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on HAL at strike $32.50 using 300 shares is offering an income potential of $300. In April, a strike 33.00 covered call offers $420 and in May, a strike 34.00 covered call offers $468 in premium.

The annualized return by writing covered calls in March is 61.41%, in April is 35.21% and in May is 22.60%.

Chart for HAL

A March covered call on OXY at strike $70.00 using 300 shares is offering an income potential of $471. In May, a strike 70.00 covered call offers $1,050 and in August, a strike 70.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in March is 44.27%, in May is 23.53% and in August is 14.56%.

Chart for OXY


Healthcare Focus: Income Opportunities

An April covered call on PFE at strike $31.00 using 300 shares is offering an income potential of $117. In May, a strike 31.00 covered call offers $213 in premium.

The annualized return by writing covered calls in April is 10.22% and in May is 10.78%.

Chart for PFE

A March covered call on ESRX at strike $72.50 using 300 shares is offering an income potential of $243. In April, a strike 72.50 covered call offers $483 and in May, a strike 72.50 covered call offers $795 in premium.

The annualized return by writing covered calls in March is 22.29%, in April is 18.12% and in May is 17.35%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

A March covered call on WBA at strike $79.00 using 300 shares is offering an income potential of $624. In April, a strike 80.00 covered call offers $930 and in June, a strike 80.00 covered call offers $1,305 in premium.

The annualized return by writing covered calls in March is 37.94%, in April is 31.49% and in June is 19.19%.

Chart for WBA

A March covered call on CVS at strike $98.00 using 300 shares is offering an income potential of $423. In April, a strike 100.00 covered call offers $465 and in May, a strike 100.00 covered call offers $750 in premium.

The annualized return by writing covered calls in March is 28.18%, in April is 12.54% and in May is 11.71%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An April covered call on FOXA at strike $28.00 using 300 shares is offering an income potential of $150. In July, a strike 28.00 covered call offers $360 in premium.

The annualized return by writing covered calls in April is 14.61% and in July is 12.27%.

Chart for FOXA

A March covered call on GM at strike $29.50 using 300 shares is offering an income potential of $189. In April, a strike 30.00 covered call offers $225 and in June, a strike 30.00 covered call offers $414 in premium.

The annualized return by writing covered calls in March is 42.01%, in April is 20.30% and in June is 16.32%.

Chart for GM


Financials Focus: Income Opportunities

A March covered call on AXP at strike $56.00 using 300 shares is offering an income potential of $285. In April, a strike 57.50 covered call offers $303 and in July, a strike 57.50 covered call offers $726 in premium.

The annualized return by writing covered calls in March is 33.41%, in April is 14.37% and in July is 12.04%.

Chart for AXP

A March covered call on MS at strike $25.00 using 300 shares is offering an income potential of $207. 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 55.21%, in April is 37.58% and in May is 28.58%.

Chart for MS


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $79.00 using 300 shares is offering an income potential of $567. In April, a strike 80.00 covered call offers $714 and in May, a strike 80.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in March is 47.17%, in April is 24.17% and in May is 20.36%.

Chart for UNP

A March covered call on HTZ at strike $9.00 using 300 shares is offering an income potential of $135. In April, a strike 9.00 covered call offers $195 and in June, a strike 9.00 covered call offers $330 in premium.

The annualized return by writing covered calls in March is 107.39%, in April is 64.30% and in June is 49.32%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on CF at strike $36.50 using 300 shares is offering an income potential of $465. In April, a strike 40.00 covered call offers $303 and in May, a strike 40.00 covered call offers $516 in premium.

The annualized return by writing covered calls in March is 85.29%, in April is 22.13% and in May is 22.04%.

Chart for CF

A March covered call on FCX at strike $8.00 using 300 shares is offering an income potential of $123. In April, a strike 8.00 covered call offers $228 and in May, a strike 8.00 covered call offers $327 in premium.

The annualized return by writing covered calls in March is 109.24%, in April is 86.04% and in May is 74.30%.

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 $300. In April, a strike 75.00 covered call offers $570 and in July, a strike 75.00 covered call offers $870 in premium.

The annualized return by writing covered calls in March is 26.15%, in April is 20.34% and in July is 10.72%.

Chart for DUK

A March covered call on ED at strike $72.50 using 300 shares is offering an income potential of $105. In April, a strike 72.50 covered call offers $270 and in May, a strike 72.50 covered call offers $405 in premium.

The annualized return by writing covered calls in March is 9.63%, in April is 10.09% and in May is 8.73%.

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 $225 and in July, a strike 31.00 covered call offers $465 in premium.

The annualized return by writing covered calls in March is 25.45%, in April is 19.52% and in July is 14.12%.

Chart for CTL

A March covered call on LVLT at strike $49.00 using 300 shares is offering an income potential of $405. In April, a strike 49.00 covered call offers $630 and in June, a strike 49.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in March is 54.58%, in April is 34.87% and in June is 27.18%.

Chart for LVLT

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

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