Income Alerts Newsletter for 03/08/2016

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 $105.50 for April 1 2016 are offering a 1.64% return, which annualizes at a rate of 23.88%.

Chart for QQQ

The DIA options at strike $171.00 for March 31 2016 are offering a 1.22% return, which annualizes at a rate of 18.50%.

Chart for DIA

The SPY options at strike $201.00 for March 31 2016 are offering a 1.18% return, which annualizes at a rate of 17.95%.

Chart for SPY


Technology Focus: Income Opportunities

A March covered call on QCOM at strike $53.50 using 300 shares is offering an income potential of $240. In April, a strike 55.00 covered call offers $285 and in May, a strike 55.00 covered call offers $594 in premium.

The annualized return by writing covered calls in March is 46.35%, in April is 16.56% and in May is 18.78%.

Chart for QCOM

A March covered call on BABA at strike $73.00 using 300 shares is offering an income potential of $510. In April, a strike 75.00 covered call offers $669 and in July, a strike 75.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in March is 72.63%, in April is 28.80% and in July is 23.19%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on APC at strike $45.50 using 300 shares is offering an income potential of $489. In April, a strike 47.50 covered call offers $648 and in May, a strike 47.50 covered call offers $1,050 in premium.

The annualized return by writing covered calls in March is 114.05%, in April is 45.90% and in May is 40.95%.

Chart for APC

A March covered call on OXY at strike $70.50 using 300 shares is offering an income potential of $279. In April, a strike 72.50 covered call offers $375 and in May, a strike 72.50 covered call offers $660 in premium.

The annualized return by writing covered calls in March is 40.75%, in April is 16.51% and in May is 15.71%.

Chart for OXY


Healthcare Focus: Income Opportunities

A March covered call on ESRX at strike $71.00 using 300 shares is offering an income potential of $336. In April, a strike 72.50 covered call offers $426 and in May, a strike 72.50 covered call offers $885 in premium.

The annualized return by writing covered calls in March is 48.86%, in April is 18.66% and in May is 21.14%.

Chart for ESRX

A March covered call on GILD at strike $90.00 using 300 shares is offering an income potential of $369. In April, a strike 90.00 covered call offers $771 and in May, a strike 90.00 covered call offers $1,170 in premium.

The annualized return by writing covered calls in March is 42.31%, in April is 26.93% and in May is 22.13%.

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 $393. In April, a strike 80.00 covered call offers $723 and in June, a strike 80.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in March is 51.19%, in April is 28.66% and in June is 18.12%.

Chart for WBA

A March covered call on ADM at strike $37.50 using 300 shares is offering an income potential of $135. In April, a strike 38.00 covered call offers $258 and in June, a strike 38.00 covered call offers $474 in premium.

The annualized return by writing covered calls in March is 37.31%, in April is 21.63% and in June is 15.75%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A March covered call on CBS at strike $52.50 using 300 shares is offering an income potential of $123. In April, a strike 52.50 covered call offers $441 and in June, a strike 52.50 covered call offers $774 in premium.

The annualized return by writing covered calls in March is 24.17%, in April is 26.55% and in June is 18.50%.

Chart for CBS

A March covered call on CMCSA at strike $59.00 using 300 shares is offering an income potential of $375. In April, a strike 60.00 covered call offers $297 and in July, a strike 60.00 covered call offers $711 in premium.

The annualized return by writing covered calls in March is 65.88%, in April is 15.58% and in July is 11.67%.

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 25.66% and in May is 20.19%.

Chart for BAC

A March covered call on MET at strike $43.00 using 300 shares is offering an income potential of $177. In April, a strike 45.00 covered call offers $159 and in May, a strike 45.00 covered call offers $300 in premium.

The annualized return by writing covered calls in March is 42.47%, in April is 11.43% and in May is 11.63%.

Chart for MET


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $81.50 using 300 shares is offering an income potential of $390. In April, a strike 82.50 covered call offers $513 and in May, a strike 82.50 covered call offers $915 in premium.

The annualized return by writing covered calls in March is 49.33%, in April is 19.57% and in May is 18.93%.

Chart for UNP

A March covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $105. In April, a strike 11.00 covered call offers $195 and in June, a strike 11.00 covered call offers $390 in premium.

The annualized return by writing covered calls in March is 102.86%, in April is 59.02% and in June is 49.01%.

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 $219. In April, a strike 27.00 covered call offers $408 and in May, a strike 27.00 covered call offers $615 in premium.

The annualized return by writing covered calls in March is 86.06%, in April is 49.30% and in May is 40.75%.

Chart for NEM

A March covered call on CF at strike $37.00 using 300 shares is offering an income potential of $345. In April, a strike 40.00 covered call offers $300 and in May, a strike 40.00 covered call offers $540 in premium.

The annualized return by writing covered calls in March is 97.90%, in April is 25.43% and in May is 24.97%.

Chart for CF


Utilities Focus: Income Opportunities

A March covered call on DUK at strike $77.50 using 300 shares is offering an income potential of $105. In April, a strike 77.50 covered call offers $360 and in July, a strike 77.50 covered call offers $660 in premium.

The annualized return by writing covered calls in March is 14.03%, in April is 14.59% and in July is 8.28%.

Chart for DUK

An April covered call on AEP at strike $65.00 using 300 shares is offering an income potential of $210. In May, a strike 65.00 covered call offers $330 in premium.

The annualized return by writing covered calls in April is 10.21% and in May is 8.61%.

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 $165. In April, a strike 32.00 covered call offers $315 and in July, a strike 32.00 covered call offers $555 in premium.

The annualized return by writing covered calls in March is 53.58%, in April is 31.19% and in July is 17.23%.

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 9.05% and in June is 13.00%.

Chart for LVLT

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

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