Income Alerts Newsletter for 03/04/2016

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 1.42% return, which annualizes at a rate of 24.70%.

Chart for QQQ

The DIA options at strike $169.50 for March 24 2016 are offering a 1.03% return, which annualizes at a rate of 17.83%.

Chart for DIA

The SPY options at strike $200.00 for March 24 2016 are offering a 1.17% return, which annualizes at a rate of 20.33%.

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 $276. In April, a strike 52.50 covered call offers $510 and in May, a strike 52.50 covered call offers $834 in premium.

The annualized return by writing covered calls in March is 40.78%, in April is 27.83% and in May is 25.90%.

Chart for QCOM

A March covered call on BABA at strike $71.50 using 300 shares is offering an income potential of $516. In April, a strike 72.50 covered call offers $801 and in July, a strike 72.50 covered call offers $1,680 in premium.

The annualized return by writing covered calls in March is 56.62%, in April is 32.41% and in July is 23.14%.

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 $612. In April, a strike 45.00 covered call offers $723 and in May, a strike 45.00 covered call offers $990 in premium.

The annualized return by writing covered calls in March is 113.67%, in April is 49.28% and in May is 38.42%.

Chart for APC

A March covered call on OXY at strike $70.50 using 300 shares is offering an income potential of $351. In April, a strike 72.50 covered call offers $405 and in May, a strike 72.50 covered call offers $693 in premium.

The annualized return by writing covered calls in March is 38.50%, in April is 16.20% and in May is 15.65%.

Chart for OXY


Healthcare Focus: Income Opportunities

A March covered call on ESRX at strike $72.50 using 300 shares is offering an income potential of $390. In April, a strike 72.50 covered call offers $678 and in May, a strike 72.50 covered call offers $1,005 in premium.

The annualized return by writing covered calls in March is 41.71%, in April is 26.73% and in May is 22.42%.

Chart for ESRX

A March covered call on MCK at strike $165.00 using 300 shares is offering an income potential of $345. In April, a strike 165.00 covered call offers $990 and in May, a strike 165.00 covered call offers $1,590 in premium.

The annualized return by writing covered calls in March is 16.24%, in April is 17.17% and in May is 15.56%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A March covered call on WBA at strike $80.00 using 300 shares is offering an income potential of $270. In April, a strike 80.00 covered call offers $708 and in June, a strike 80.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in March is 25.98%, in April is 25.24% and in June is 18.92%.

Chart for WBA

A March covered call on ADM at strike $37.00 using 300 shares is offering an income potential of $114. In April, a strike 37.00 covered call offers $330 and in June, a strike 37.00 covered call offers $594 in premium.

The annualized return by writing covered calls in March is 23.78%, in April is 25.54% and in June is 19.38%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A March covered call on CBS at strike $51.50 using 300 shares is offering an income potential of $282. In April, a strike 52.50 covered call offers $426 and in June, a strike 52.50 covered call offers $807 in premium.

The annualized return by writing covered calls in March is 42.43%, in April is 23.53% and in June is 18.81%.

Chart for CBS

A March covered call on CMCSA at strike $60.00 using 300 shares is offering an income potential of $279. In April, a strike 60.00 covered call offers $456 and in July, a strike 60.00 covered call offers $885 in premium.

The annualized return by writing covered calls in March is 35.96%, in April is 21.59% and in July is 14.00%.

Chart for CMCSA


Financials Focus: Income Opportunities

An April covered call on BAC at strike $14.00 using 300 shares is offering an income potential of $111. In May, a strike 14.00 covered call offers $168 in premium.

The annualized return by writing covered calls in April is 23.38% and in May is 19.99%.

Chart for BAC

A March covered call on MET at strike $42.50 using 300 shares is offering an income potential of $231. In April, a strike 42.50 covered call offers $423 and in May, a strike 42.50 covered call offers $552 in premium.

The annualized return by writing covered calls in March is 42.20%, in April is 28.54% and in May is 20.96%.

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 $375. In April, a strike 82.50 covered call offers $471 and in May, a strike 82.50 covered call offers $768 in premium.

The annualized return by writing covered calls in March is 36.21%, in April is 16.60% and in May is 15.27%.

Chart for UNP

A March covered call on HTZ at strike $10.50 using 300 shares is offering an income potential of $105. In April, a strike 11.00 covered call offers $150 and in June, a strike 11.00 covered call offers $300 in premium.

The annualized return by writing covered calls in March is 82.65%, in April is 43.61% and in June is 37.86%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on NEM at strike $27.00 using 300 shares is offering an income potential of $273. In April, a strike 27.00 covered call offers $465 and in May, a strike 27.00 covered call offers $657 in premium.

The annualized return by writing covered calls in March is 80.12%, in April is 50.88% and in May is 41.08%.

Chart for NEM

A March covered call on CF at strike $36.50 using 300 shares is offering an income potential of $303. In April, a strike 40.00 covered call offers $240 and in May, a strike 40.00 covered call offers $453 in premium.

The annualized return by writing covered calls in March is 65.49%, in April is 18.75% and in May is 20.12%.

Chart for CF


Utilities Focus: Income Opportunities

A March covered call on DUK at strike $75.00 using 300 shares is offering an income potential of $240. In April, a strike 75.00 covered call offers $480 and in July, a strike 75.00 covered call offers $765 in premium.

The annualized return by writing covered calls in March is 24.82%, in April is 18.25% and in July is 9.60%.

Chart for DUK

A March covered call on AEP at strike $62.50 using 300 shares is offering an income potential of $180. In April, a strike 62.50 covered call offers $345 and in May, a strike 62.50 covered call offers $405 in premium.

The annualized return by writing covered calls in March is 22.38%, in April is 15.74% and in May is 10.32%.

Chart for AEP


Telecommunications Focus: Income Opportunities

A March covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $105. In April, a strike 32.00 covered call offers $240 and in July, a strike 32.00 covered call offers $495 in premium.

The annualized return by writing covered calls in March is 25.74%, in April is 21.71% and in July is 15.01%.

Chart for CTL

An April covered call on LVLT at strike $55.00 using 300 shares is offering an income potential of $225. In June, a strike 55.00 covered call offers $585 in premium.

The annualized return by writing covered calls in April is 12.27% and in June is 13.43%.

Chart for LVLT

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

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