Income Alerts Newsletter for 03/03/2016

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 1.54% return, which annualizes at a rate of 25.47%.

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 20.99%.

Chart for DIA

The SPY options at strike $199.50 for March 24 2016 are offering a 1.14% return, which annualizes at a rate of 18.89%.

Chart for SPY


Technology Focus: Income Opportunities

A March covered call on QCOM at strike $53.00 using 300 shares is offering an income potential of $285. In April, a strike 55.00 covered call offers $264 and in May, a strike 55.00 covered call offers $576 in premium.

The annualized return by writing covered calls in March is 39.30%, in April is 13.73% and in May is 17.20%.

Chart for QCOM

A March covered call on BABA at strike $71.50 using 300 shares is offering an income potential of $579. In April, a strike 72.50 covered call offers $834 and in July, a strike 72.50 covered call offers $1,695 in premium.

The annualized return by writing covered calls in March is 59.78%, in April is 32.93% and in July is 23.12%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on APC at strike $43.00 using 300 shares is offering an income potential of $591. In April, a strike 45.00 covered call offers $648 and in May, a strike 45.00 covered call offers $990 in premium.

The annualized return by writing covered calls in March is 103.98%, in April is 43.27% and in May is 38.26%.

Chart for APC

A March covered call on OXY at strike $72.50 using 300 shares is offering an income potential of $264. In April, a strike 72.50 covered call offers $570 and in May, a strike 72.50 covered call offers $828 in premium.

The annualized return by writing covered calls in March is 26.71%, in April is 22.11% and in May is 18.29%.

Chart for OXY


Healthcare Focus: Income Opportunities

A March covered call on ESRX at strike $71.50 using 300 shares is offering an income potential of $384. In April, a strike 72.50 covered call offers $522 and in May, a strike 72.50 covered call offers $831 in premium.

The annualized return by writing covered calls in March is 39.31%, in April is 20.32% and in May is 18.47%.

Chart for ESRX

A March covered call on GILD at strike $89.00 using 300 shares is offering an income potential of $501. In April, a strike 90.00 covered call offers $708 and in May, a strike 90.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in March is 41.15%, in April is 22.15% and in May is 20.12%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A March covered call on WBA at strike $79.50 using 300 shares is offering an income potential of $462. In April, a strike 80.00 covered call offers $837 and in June, a strike 80.00 covered call offers $1,215 in premium.

The annualized return by writing covered calls in March is 42.43%, in April is 29.52% and in June is 18.15%.

Chart for WBA

A March covered call on ADM at strike $36.00 using 300 shares is offering an income potential of $207. In April, a strike 36.00 covered call offers $363 and in June, a strike 36.00 covered call offers $582 in premium.

The annualized return by writing covered calls in March is 42.16%, in April is 28.35% and in June is 19.35%.

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 $273 and in June, a strike 52.50 covered call offers $594 in premium.

The annualized return by writing covered calls in March is 45.02%, in April is 14.99% and in June is 13.89%.

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 $798 in premium.

The annualized return by writing covered calls in March is 35.66%, in April is 17.73% and in July is 12.59%.

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 $96. In April, a strike 14.00 covered call offers $105 and in May, a strike 14.00 covered call offers $156 in premium.

The annualized return by writing covered calls in March is 52.49%, in April is 21.74% and in May is 18.41%.

Chart for BAC

A March covered call on MET at strike $42.50 using 300 shares is offering an income potential of $207. In April, a strike 42.50 covered call offers $369 and in May, a strike 42.50 covered call offers $531 in premium.

The annualized return by writing covered calls in March is 35.85%, in April is 24.46% and in May is 20.07%.

Chart for MET


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $80.00 using 300 shares is offering an income potential of $393. In April, a strike 80.00 covered call offers $693 and in May, a strike 80.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in March is 35.97%, in April is 24.27% and in May is 20.38%.

Chart for UNP

A March covered call on HTZ at strike $10.00 using 300 shares is offering an income potential of $150. In April, a strike 10.00 covered call offers $240 and in June, a strike 10.00 covered call offers $405 in premium.

The annualized return by writing covered calls in March is 113.84%, in April is 71.07% and in June is 53.18%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on NEM at strike $26.50 using 300 shares is offering an income potential of $270. In April, a strike 27.00 covered call offers $393 and in May, a strike 27.00 covered call offers $585 in premium.

The annualized return by writing covered calls in March is 76.26%, in April is 42.62% and in May is 36.63%.

Chart for NEM

A March covered call on CF at strike $35.00 using 300 shares is offering an income potential of $363. In April, a strike 35.00 covered call offers $618 and in May, a strike 35.00 covered call offers $858 in premium.

The annualized return by writing covered calls in March is 77.48%, in April is 51.13% and in May is 40.93%.

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 $375 and in May, a strike 62.50 covered call offers $510 in premium.

The annualized return by writing covered calls in March is 22.79%, in April is 16.72% and in May is 12.89%.

Chart for AEP

A May covered call on AES at strike $11.00 using 300 shares is offering an income potential of $90. In August, a strike 11.00 covered call offers $150 in premium.

The annualized return by writing covered calls in May is 13.71% and in August is 10.91%.

Chart for AES


Telecommunications Focus: Income Opportunities

A March covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $90. In April, a strike 32.00 covered call offers $225 and in July, a strike 32.00 covered call offers $420 in premium.

The annualized return by writing covered calls in March is 20.88%, in April is 20.01% and in July is 12.63%.

Chart for CTL

An April covered call on LVLT at strike $55.00 using 300 shares is offering an income potential of $150. In June, a strike 55.00 covered call offers $540 in premium.

The annualized return by writing covered calls in April is 8.08% and in June is 12.44%.

Chart for LVLT

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

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