Income Alerts Newsletter for 03/02/2016

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 $106.00 for March 24 2016 are offering a 1.70% return, which annualizes at a rate of 27.00%.

Chart for QQQ

The DIA options at strike $169.00 for March 24 2016 are offering a 1.27% return, which annualizes at a rate of 20.22%.

Chart for DIA

The SPY options at strike $198.50 for March 24 2016 are offering a 1.39% return, which annualizes at a rate of 22.01%.

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 $270. In April, a strike 52.50 covered call offers $495 and in May, a strike 52.50 covered call offers $807 in premium.

The annualized return by writing covered calls in March is 35.64%, in April is 25.95% and in May is 24.53%.

Chart for QCOM

A March covered call on BABA at strike $71.00 using 300 shares is offering an income potential of $654. In April, a strike 72.50 covered call offers $819 and in July, a strike 72.50 covered call offers $1,650 in premium.

The annualized return by writing covered calls in March is 64.36%, in April is 31.80% and in July is 22.42%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on APC at strike $40.50 using 300 shares is offering an income potential of $591. In April, a strike 42.50 covered call offers $636 and in May, a strike 42.50 covered call offers $945 in premium.

The annualized return by writing covered calls in March is 104.74%, in April is 44.28% and in May is 38.40%.

Chart for APC

A March covered call on OXY at strike $72.50 using 300 shares is offering an income potential of $174. In April, a strike 72.50 covered call offers $438 and in May, a strike 72.50 covered call offers $726 in premium.

The annualized return by writing covered calls in March is 16.83%, in April is 16.79% and in May is 16.03%.

Chart for OXY


Healthcare Focus: Income Opportunities

A March covered call on ESRX at strike $72.00 using 300 shares is offering an income potential of $390. In April, a strike 72.50 covered call offers $573 and in May, a strike 72.50 covered call offers $894 in premium.

The annualized return by writing covered calls in March is 37.49%, in April is 21.74% and in May is 19.57%.

Chart for ESRX

A March covered call on GILD at strike $90.00 using 300 shares is offering an income potential of $480. In April, a strike 90.00 covered call offers $831 and in May, a strike 90.00 covered call offers $1,275 in premium.

The annualized return by writing covered calls in March is 36.83%, in April is 25.29% and in May is 22.41%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A March covered call on WBA at strike $80.50 using 300 shares is offering an income potential of $468. In April, a strike 82.50 covered call offers $645 and in June, a strike 82.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in March is 40.15%, in April is 21.82% and in June is 14.80%.

Chart for WBA

A March covered call on ADM at strike $35.50 using 300 shares is offering an income potential of $234. In April, a strike 36.00 covered call offers $321 and in June, a strike 36.00 covered call offers $540 in premium.

The annualized return by writing covered calls in March is 45.58%, in April is 24.67% and in June is 17.90%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A March covered call on CBS at strike $50.50 using 300 shares is offering an income potential of $309. In April, a strike 52.50 covered call offers $288 and in June, a strike 52.50 covered call offers $633 in premium.

The annualized return by writing covered calls in March is 42.43%, in April is 15.45% and in June is 14.68%.

Chart for CBS

A March covered call on CMCSA at strike $59.50 using 300 shares is offering an income potential of $291. In April, a strike 60.00 covered call offers $381 and in July, a strike 60.00 covered call offers $786 in premium.

The annualized return by writing covered calls in March is 33.77%, in April is 17.39% and in July is 12.33%.

Chart for CMCSA


Financials Focus: Income Opportunities

A March covered call on BAC at strike $13.50 using 300 shares is offering an income potential of $72. In April, a strike 14.00 covered call offers $81 and in May, a strike 14.00 covered call offers $129 in premium.

The annualized return by writing covered calls in March is 37.58%, in April is 16.58% and in May is 15.19%.

Chart for BAC

A March covered call on MET at strike $42.00 using 300 shares is offering an income potential of $264. In April, a strike 42.50 covered call offers $351 and in May, a strike 42.50 covered call offers $492 in premium.

The annualized return by writing covered calls in March is 43.74%, in April is 22.92% and in May is 18.46%.

Chart for MET


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $80.50 using 300 shares is offering an income potential of $453. In April, a strike 82.50 covered call offers $483 and in May, a strike 82.50 covered call offers $798 in premium.

The annualized return by writing covered calls in March is 38.95%, in April is 16.27% and in May is 15.47%.

Chart for UNP

A March covered call on HTZ at strike $10.00 using 300 shares is offering an income potential of $105. In April, a strike 10.00 covered call offers $195 and in June, a strike 10.00 covered call offers $345 in premium.

The annualized return by writing covered calls in March is 77.23%, in April is 58.02% and in June is 45.90%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on NEM at strike $25.50 using 300 shares is offering an income potential of $300. In April, a strike 26.00 covered call offers $414 and in May, a strike 26.00 covered call offers $600 in premium.

The annualized return by writing covered calls in March is 83.14%, in April is 45.61% and in May is 38.53%.

Chart for NEM

A March covered call on CF at strike $36.50 using 300 shares is offering an income potential of $411. In April, a strike 40.00 covered call offers $249 and in May, a strike 40.00 covered call offers $465 in premium.

The annualized return by writing covered calls in March is 79.65%, in April is 18.59% and in May is 20.13%.

Chart for CF


Utilities Focus: Income Opportunities

A March covered call on AEP at strike $62.50 using 300 shares is offering an income potential of $195. In April, a strike 62.50 covered call offers $360 and in May, a strike 62.50 covered call offers $495 in premium.

The annualized return by writing covered calls in March is 21.58%, in April is 15.73% and in May is 12.38%.

Chart for AEP

A May covered call on AES at strike $11.00 using 300 shares is offering an income potential of $75. In August, a strike 11.00 covered call offers $135 in premium.

The annualized return by writing covered calls in May is 11.41% and in August is 9.88%.

Chart for AES


Telecommunications Focus: Income Opportunities

An April covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $150. In July, a strike 32.00 covered call offers $330 in premium.

The annualized return by writing covered calls in April is 12.96% and in July is 9.76%.

Chart for CTL

A March covered call on LVLT at strike $50.00 using 300 shares is offering an income potential of $315. In April, a strike 50.00 covered call offers $555 and in June, a strike 50.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in March is 43.89%, in April is 30.77% and in June is 24.66%.

Chart for LVLT

* 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.