Income Alerts Newsletter for 03/15/2016

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 $107.00 for April 8 2016 are offering a 1.45% return, which annualizes at a rate of 21.11%.

Chart for QQQ

The DIA options at strike $172.50 for April 8 2016 are offering a 1.28% return, which annualizes at a rate of 18.70%.

Chart for DIA

The SPY options at strike $203.00 for April 8 2016 are offering a 1.06% return, which annualizes at a rate of 15.52%.

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 $96. In April, a strike 52.50 covered call offers $393 and in May, a strike 52.50 covered call offers $726 in premium.

The annualized return by writing covered calls in March is 45.12%, in April is 28.53% and in May is 26.15%.

Chart for QCOM

A March covered call on BABA at strike $73.50 using 300 shares is offering an income potential of $312. In April, a strike 75.00 covered call offers $627 and in July, a strike 75.00 covered call offers $1,560 in premium.

The annualized return by writing covered calls in March is 104.99%, in April is 32.44% and in July is 22.46%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on OXY at strike $69.50 using 300 shares is offering an income potential of $219. In April, a strike 70.00 covered call offers $555 and in May, a strike 70.00 covered call offers $882 in premium.

The annualized return by writing covered calls in March is 78.00%, in April is 30.45% and in May is 23.87%.

Chart for OXY

A March covered call on APC at strike $46.50 using 300 shares is offering an income potential of $375. In April, a strike 47.50 covered call offers $900 and in May, a strike 47.50 covered call offers $1,215 in premium.

The annualized return by writing covered calls in March is 202.51%, in April is 76.61% and in May is 51.44%.

Chart for APC


Healthcare Focus: Income Opportunities

A March covered call on ESRX at strike $71.00 using 300 shares is offering an income potential of $240. In April, a strike 72.50 covered call offers $372 and in May, a strike 72.50 covered call offers $741 in premium.

The annualized return by writing covered calls in March is 83.26%, in April is 19.68% and in May is 19.36%.

Chart for ESRX

A March covered call on GILD at strike $90.50 using 300 shares is offering an income potential of $297. In April, a strike 92.50 covered call offers $522 and in May, a strike 92.50 covered call offers $975 in premium.

The annualized return by writing covered calls in March is 80.78%, in April is 21.69% and in May is 20.00%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A March covered call on CVS at strike $102.00 using 300 shares is offering an income potential of $96. In April, a strike 105.00 covered call offers $135 and in May, a strike 105.00 covered call offers $387 in premium.

The annualized return by writing covered calls in March is 23.20%, in April is 4.95% and in May is 6.94%.

Chart for CVS

An April covered call on KO at strike $46.00 using 300 shares is offering an income potential of $93. In May, a strike 46.00 covered call offers $204 in premium.

The annualized return by writing covered calls in April is 7.62% and in May is 8.18%.

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 $465 in premium.

The annualized return by writing covered calls in April is 26.46% and in July is 17.37%.

Chart for FOXA

An April covered call on GM at strike $32.00 using 300 shares is offering an income potential of $156. In June, a strike 32.00 covered call offers $354 in premium.

The annualized return by writing covered calls in April is 18.76% and in June is 14.95%.

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 $114. In May, a strike 14.00 covered call offers $174 in premium.

The annualized return by writing covered calls in April is 31.70% and in May is 23.84%.

Chart for BAC

A March covered call on MS at strike $26.00 using 300 shares is offering an income potential of $111. In April, a strike 26.00 covered call offers $285 and in May, a strike 26.00 covered call offers $408 in premium.

The annualized return by writing covered calls in March is 105.76%, in April is 42.10% and in May is 29.74%.

Chart for MS


Industrials Focus: Income Opportunities

A March covered call on UNP at strike $80.50 using 300 shares is offering an income potential of $243. In April, a strike 82.50 covered call offers $366 and in May, a strike 82.50 covered call offers $726 in premium.

The annualized return by writing covered calls in March is 74.34%, in April is 17.05% and in May is 16.67%.

Chart for UNP

A March covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $75. In April, a strike 11.00 covered call offers $210 and in June, a strike 11.00 covered call offers $390 in premium.

The annualized return by writing covered calls in March is 172.17%, in April is 76.28% and in June is 51.76%.

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 $108. In April, a strike 10.00 covered call offers $303 and in May, a strike 10.00 covered call offers $435 in premium.

The annualized return by writing covered calls in March is 273.47%, in April is 124.68% and in May is 91.35%.

Chart for FCX

An April covered call on HUN at strike $13.00 using 300 shares is offering an income potential of $105. In May, a strike 13.00 covered call offers $225 in premium.

The annualized return by writing covered calls in April is 33.03% and in May is 35.56%.

Chart for HUN


Utilities Focus: Income Opportunities

An April covered call on AES at strike $11.00 using 300 shares is offering an income potential of $90. In May, a strike 11.00 covered call offers $150 in premium.

The annualized return by writing covered calls in April is 31.13% and in May is 25.66%.

Chart for AES

An April covered call on CNP at strike $21.00 using 300 shares is offering an income potential of $75. In May, a strike 21.00 covered call offers $135 in premium.

The annualized return by writing covered calls in April is 13.70% and in May is 12.09%.

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 $315 and in July, a strike 32.00 covered call offers $615 in premium.

The annualized return by writing covered calls in March is 92.55%, in April is 37.58% and in July is 20.18%.

Chart for CTL

A March covered call on SBAC at strike $95.00 using 300 shares is offering an income potential of $240. In April, a strike 95.00 covered call offers $720 and in June, a strike 95.00 covered call offers $1,410 in premium.

The annualized return by writing covered calls in March is 62.41%, in April is 28.86% and in June is 19.93%.

Chart for SBAC

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

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