Income Alerts Newsletter for 03/10/2016

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 $105.00 for March 31 2016 are offering a 1.71% return, which annualizes at a rate of 28.33%.

Chart for QQQ

The DIA options at strike $170.50 for April 1 2016 are offering a 1.29% return, which annualizes at a rate of 20.52%.

Chart for DIA

The SPY options at strike $199.50 for April 1 2016 are offering a 1.36% return, which annualizes at a rate of 21.62%.

Chart for SPY


Technology Focus: Income Opportunities

A March covered call on QCOM at strike $52.00 using 300 shares is offering an income potential of $288. In April, a strike 52.50 covered call offers $444 and in May, a strike 52.50 covered call offers $762 in premium.

The annualized return by writing covered calls in March is 68.72%, in April is 28.17% and in May is 25.70%.

Chart for QCOM

A March covered call on BABA at strike $72.50 using 300 shares is offering an income potential of $360. In April, a strike 72.50 covered call offers $975 and in July, a strike 72.50 covered call offers $1,875 in premium.

The annualized return by writing covered calls in March is 61.49%, in April is 45.12% and in July is 26.72%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on OXY at strike $68.50 using 300 shares is offering an income potential of $708. In April, a strike 70.00 covered call offers $576 and in May, a strike 70.00 covered call offers $852 in premium.

The annualized return by writing covered calls in March is 130.38%, in April is 27.73% and in May is 21.65%.

Chart for OXY

A March covered call on APC at strike $42.50 using 300 shares is offering an income potential of $531. In April, a strike 42.50 covered call offers $729 and in May, a strike 42.50 covered call offers $1,275 in premium.

The annualized return by writing covered calls in March is 159.32%, in April is 58.51% and in May is 55.82%.

Chart for APC


Healthcare Focus: Income Opportunities

A March covered call on MCK at strike $165.00 using 300 shares is offering an income potential of $180. In April, a strike 165.00 covered call offers $900 and in May, a strike 165.00 covered call offers $1,710 in premium.

The annualized return by writing covered calls in March is 13.58%, in April is 18.14% and in May is 18.25%.

Chart for MCK

A March covered call on MRK at strike $52.50 using 300 shares is offering an income potential of $96. In April, a strike 52.50 covered call offers $267 and in May, a strike 52.50 covered call offers $459 in premium.

The annualized return by writing covered calls in March is 22.44%, in April is 16.61% and in May is 15.05%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A March covered call on CVS at strike $101.00 using 300 shares is offering an income potential of $249. In April, a strike 105.00 covered call offers $165 and in May, a strike 105.00 covered call offers $411 in premium.

The annualized return by writing covered calls in March is 30.39%, in April is 5.28% and in May is 6.91%.

Chart for CVS

An April covered call on KO at strike $45.00 using 300 shares is offering an income potential of $138. In May, a strike 45.00 covered call offers $231 in premium.

The annualized return by writing covered calls in April is 9.96% and in May is 8.74%.

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 $210 and in July, a strike 28.00 covered call offers $450 in premium.

The annualized return by writing covered calls in March is 33.24%, in April is 24.90% and in July is 16.20%.

Chart for FOXA

A March covered call on GM at strike $31.00 using 300 shares is offering an income potential of $96. In April, a strike 31.00 covered call offers $234 and in June, a strike 31.00 covered call offers $450 in premium.

The annualized return by writing covered calls in March is 38.65%, in April is 25.18% and in June is 18.67%.

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 $78. In May, a strike 14.00 covered call offers $129 in premium.

The annualized return by writing covered calls in April is 19.39% and in May is 16.92%.

Chart for BAC

A March covered call on AXP at strike $59.50 using 300 shares is offering an income potential of $255. In April, a strike 60.00 covered call offers $417 and in July, a strike 60.00 covered call offers $840 in premium.

The annualized return by writing covered calls in March is 53.31%, in April is 23.16% and in July is 14.08%.

Chart for AXP


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $80.50 using 300 shares is offering an income potential of $330. In April, a strike 82.50 covered call offers $417 and in May, a strike 82.50 covered call offers $753 in premium.

The annualized return by writing covered calls in March is 50.80%, in April is 16.95% and in May is 16.17%.

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 $120 and in June, a strike 11.00 covered call offers $285 in premium.

The annualized return by writing covered calls in March is 111.05%, in April is 39.37% and in June is 37.28%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on FCX at strike $9.50 using 300 shares is offering an income potential of $120. In April, a strike 10.00 covered call offers $219 and in May, a strike 10.00 covered call offers $324 in premium.

The annualized return by writing covered calls in March is 166.86%, in April is 83.28% and in May is 66.91%.

Chart for FCX

A March covered call on HUN at strike $12.00 using 300 shares is offering an income potential of $105. In April, a strike 12.00 covered call offers $210 and in May, a strike 12.00 covered call offers $300 in premium.

The annualized return by writing covered calls in March is 110.32%, in April is 59.87% and in May is 45.75%.

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 17.24% and in August is 14.69%.

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 $150 and in May, a strike 20.00 covered call offers $195 in premium.

The annualized return by writing covered calls in March is 46.32%, in April is 24.69% and in May is 16.84%.

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 $105. In April, a strike 32.00 covered call offers $285 and in July, a strike 32.00 covered call offers $435 in premium.

The annualized return by writing covered calls in March is 40.97%, in April is 29.84% and in July is 13.64%.

Chart for CTL

A March covered call on TMUS at strike $38.50 using 300 shares is offering an income potential of $180. In April, a strike 39.00 covered call offers $306 and in May, a strike 39.00 covered call offers $540 in premium.

The annualized return by writing covered calls in March is 58.24%, in April is 26.35% and in May is 24.73%.

Chart for TMUS

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

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