Income Alerts Newsletter for 03/09/2016

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 $104.50 for April 1 2016 are offering a 1.86% return, which annualizes at a rate of 28.26%.

Chart for QQQ

The DIA options at strike $170.00 for March 31 2016 are offering a 1.34% return, which annualizes at a rate of 21.24%.

Chart for DIA

The SPY options at strike $198.50 for April 1 2016 are offering a 1.50% return, which annualizes at a rate of 22.88%.

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 $267. In April, a strike 52.50 covered call offers $525 and in May, a strike 52.50 covered call offers $846 in premium.

The annualized return by writing covered calls in March is 57.27%, in April is 32.30% and in May is 28.02%.

Chart for QCOM

A March covered call on BABA at strike $71.50 using 300 shares is offering an income potential of $477. In April, a strike 72.50 covered call offers $786 and in July, a strike 72.50 covered call offers $1,650 in premium.

The annualized return by writing covered calls in March is 75.93%, in April is 35.82% and in July is 23.55%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on APC at strike $41.50 using 300 shares is offering an income potential of $474. In April, a strike 42.50 covered call offers $1,050 and in May, a strike 42.50 covered call offers $1,365 in premium.

The annualized return by writing covered calls in March is 132.53%, in April is 87.03% and in May is 61.34%.

Chart for APC

A March covered call on EOG at strike $71.00 using 300 shares is offering an income potential of $570. In April, a strike 72.50 covered call offers $834 and in July, a strike 72.50 covered call offers $1,680 in premium.

The annualized return by writing covered calls in March is 91.82%, in April is 38.39% and in July is 24.20%.

Chart for EOG


Healthcare Focus: Income Opportunities

A March covered call on MCK at strike $160.00 using 300 shares is offering an income potential of $510. In April, a strike 160.00 covered call offers $1,290 and in May, a strike 160.00 covered call offers $1,890 in premium.

The annualized return by writing covered calls in March is 35.91%, in April is 26.05% and in May is 20.38%.

Chart for MCK

A March covered call on MRK at strike $52.50 using 300 shares is offering an income potential of $120. In April, a strike 52.50 covered call offers $291 and in May, a strike 52.50 covered call offers $480 in premium.

The annualized return by writing covered calls in March is 25.50%, in April is 17.63% and in May is 15.52%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A March covered call on CVS at strike $99.50 using 300 shares is offering an income potential of $249. In April, a strike 100.00 covered call offers $552 and in May, a strike 100.00 covered call offers $834 in premium.

The annualized return by writing covered calls in March is 28.04%, in April is 17.72% and in May is 14.24%.

Chart for CVS

A May covered call on KO at strike $45.00 using 300 shares is offering an income potential of $189.

The annualized return by writing covered calls in May is 7.11%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

A March covered call on FOXA at strike $28.00 using 300 shares is offering an income potential of $75. In April, a strike 28.00 covered call offers $180 and in July, a strike 28.00 covered call offers $420 in premium.

The annualized return by writing covered calls in March is 30.50%, in April is 20.91% and in July is 15.09%.

Chart for FOXA

A March covered call on GM at strike $30.50 using 300 shares is offering an income potential of $144. In April, a strike 31.00 covered call offers $222 and in June, a strike 31.00 covered call offers $417 in premium.

The annualized return by writing covered calls in March is 32.96%, in April is 23.13% and in June is 16.98%.

Chart for GM


Financials Focus: Income Opportunities

An April covered call on BAC at strike $14.00 using 300 shares is offering an income potential of $72. In May, a strike 14.00 covered call offers $123 in premium.

The annualized return by writing covered calls in April is 17.52% and in May is 15.99%.

Chart for BAC

A March covered call on AXP at strike $59.50 using 300 shares is offering an income potential of $300. In April, a strike 60.00 covered call offers $468 and in July, a strike 60.00 covered call offers $900 in premium.

The annualized return by writing covered calls in March is 56.79%, in April is 25.23% and in July is 14.93%.

Chart for AXP


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $78.50 using 300 shares is offering an income potential of $456. In April, a strike 80.00 covered call offers $603 and in May, a strike 80.00 covered call offers $990 in premium.

The annualized return by writing covered calls in March is 65.73%, in April is 24.67% and in May is 21.72%.

Chart for UNP

A March covered call on HTZ at strike $10.50 using 300 shares is offering an income potential of $90. In April, a strike 11.00 covered call offers $180 and in June, a strike 11.00 covered call offers $315 in premium.

The annualized return by writing covered calls in March is 100.15%, in April is 58.25% and in June is 40.89%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on FCX at strike $9.00 using 300 shares is offering an income potential of $138. In April, a strike 9.00 covered call offers $267 and in May, a strike 9.00 covered call offers $384 in premium.

The annualized return by writing covered calls in March is 186.14%, in April is 107.20% and in May is 85.55%.

Chart for FCX

A March covered call on HUN at strike $12.00 using 300 shares is offering an income potential of $90. In April, a strike 12.00 covered call offers $255 and in May, a strike 12.00 covered call offers $375 in premium.

The annualized return by writing covered calls in March is 86.60%, in April is 72.68% and in May is 58.47%.

Chart for HUN


Utilities Focus: Income Opportunities

A May covered call on AES at strike $11.00 using 300 shares is offering an income potential of $105. In August, a strike 11.00 covered call offers $195 in premium.

The annualized return by writing covered calls in May is 16.81% and in August is 14.42%.

Chart for AES

A March covered call on CNP at strike $20.00 using 300 shares is offering an income potential of $75. In April, a strike 20.00 covered call offers $135 and in May, a strike 20.00 covered call offers $195 in premium.

The annualized return by writing covered calls in March is 42.30%, in April is 21.70% and in May is 16.69%.

Chart for CNP


Telecommunications Focus: Income Opportunities

A March covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $120. In April, a strike 32.00 covered call offers $270 and in July, a strike 32.00 covered call offers $510 in premium.

The annualized return by writing covered calls in March is 42.66%, in April is 27.52% and in July is 16.01%.

Chart for CTL

A March covered call on TMUS at strike $39.00 using 300 shares is offering an income potential of $240. In April, a strike 39.00 covered call offers $438 and in May, a strike 39.00 covered call offers $666 in premium.

The annualized return by writing covered calls in March is 69.58%, in April is 36.45% and in May is 29.81%.

Chart for TMUS

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

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