Income Alerts Newsletter for 03/11/2016

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 1.17% return, which annualizes at a rate of 20.33%.

Chart for QQQ

The DIA options at strike $170.50 for April 1 2016 are offering a 1.18% return, which annualizes at a rate of 19.64%.

Chart for DIA

The SPY options at strike $200.00 for March 31 2016 are offering a 1.02% return, which annualizes at a rate of 17.78%.

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 $150. In April, a strike 52.50 covered call offers $420 and in May, a strike 52.50 covered call offers $699 in premium.

The annualized return by writing covered calls in March is 39.36%, in April is 27.28% and in May is 23.77%.

Chart for QCOM

A March covered call on BABA at strike $72.00 using 300 shares is offering an income potential of $447. In April, a strike 72.50 covered call offers $855 and in July, a strike 72.50 covered call offers $1,755 in premium.

The annualized return by writing covered calls in March is 85.74%, in April is 40.68% and in July is 25.23%.

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 $321. In April, a strike 70.00 covered call offers $522 and in May, a strike 70.00 covered call offers $813 in premium.

The annualized return by writing covered calls in March is 64.41%, in April is 25.73% and in May is 20.90%.

Chart for OXY

A March covered call on APC at strike $43.00 using 300 shares is offering an income potential of $405. In April, a strike 45.00 covered call offers $489 and in May, a strike 45.00 covered call offers $930 in premium.

The annualized return by writing covered calls in March is 133.05%, in April is 39.34% and in May is 39.89%.

Chart for APC


Healthcare Focus: Income Opportunities

A March covered call on GILD at strike $89.00 using 300 shares is offering an income potential of $342. In April, a strike 90.00 covered call offers $618 and in May, a strike 90.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in March is 52.84%, in April is 23.47% and in May is 20.53%.

Chart for GILD

A March covered call on MCK at strike $165.00 using 300 shares is offering an income potential of $120. In April, a strike 165.00 covered call offers $990 and in May, a strike 165.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in March is 10.09%, in April is 20.63% and in May is 15.57%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A March covered call on CVS at strike $99.50 using 300 shares is offering an income potential of $255. In April, a strike 100.00 covered call offers $552 and in May, a strike 100.00 covered call offers $864 in premium.

The annualized return by writing covered calls in March is 35.00%, in April is 18.62% and in May is 15.14%.

Chart for CVS

A May covered call on KO at strike $46.00 using 300 shares is offering an income potential of $171.

The annualized return by writing covered calls in May is 6.47%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

An April covered call on FOXA at strike $28.00 using 300 shares is offering an income potential of $195. In July, a strike 28.00 covered call offers $420 in premium.

The annualized return by writing covered calls in April is 23.93% and in July is 15.33%.

Chart for FOXA

A March covered call on GM at strike $31.00 using 300 shares is offering an income potential of $117. In April, a strike 31.00 covered call offers $267 and in June, a strike 31.00 covered call offers $450 in premium.

The annualized return by writing covered calls in March is 51.98%, in April is 29.33% 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 $144 in premium.

The annualized return by writing covered calls in April is 19.71% and in May is 19.03%.

Chart for BAC

A March covered call on AXP at strike $59.00 using 300 shares is offering an income potential of $219. In April, a strike 60.00 covered call offers $345 and in July, a strike 60.00 covered call offers $771 in premium.

The annualized return by writing covered calls in March is 51.03%, in April is 19.70% and in July is 13.04%.

Chart for AXP


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $79.50 using 300 shares is offering an income potential of $432. In April, a strike 80.00 covered call offers $573 and in May, a strike 80.00 covered call offers $990 in premium.

The annualized return by writing covered calls in March is 74.93%, in April is 24.32% and in May is 21.99%.

Chart for UNP

A March covered call on HTZ at strike $10.00 using 300 shares is offering an income potential of $90. In April, a strike 10.00 covered call offers $210 and in June, a strike 10.00 covered call offers $390 in premium.

The annualized return by writing covered calls in March is 127.13%, in April is 75.30% and in June is 55.37%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on FCX at strike $10.00 using 300 shares is offering an income potential of $105. In April, a strike 10.00 covered call offers $264 and in May, a strike 10.00 covered call offers $384 in premium.

The annualized return by writing covered calls in March is 153.45%, in April is 99.55% and in May is 77.99%.

Chart for FCX

A March covered call on HUN at strike $12.00 using 300 shares is offering an income potential of $75. In April, a strike 12.00 covered call offers $210 and in May, a strike 12.00 covered call offers $315 in premium.

The annualized return by writing covered calls in March is 86.88%, in April is 61.55% and in May is 48.97%.

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 $135. In August, a strike 11.00 covered call offers $210 in premium.

The annualized return by writing covered calls in May is 22.02% and in August is 15.50%.

Chart for AES

A May covered call on CNP at strike $21.00 using 300 shares is offering an income potential of $90.

The annualized return by writing covered calls in May is 7.65%.

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 $285 and in July, a strike 32.00 covered call offers $585 in premium.

The annualized return by writing covered calls in March is 51.81%, in April is 30.47% and in July is 18.68%.

Chart for CTL

A March covered call on VZ at strike $52.50 using 300 shares is offering an income potential of $111. In April, a strike 52.50 covered call offers $261 and in May, a strike 52.50 covered call offers $336 in premium.

The annualized return by writing covered calls in March is 28.88%, in April is 16.68% and in May is 11.09%.

Chart for VZ

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

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