Income Alerts Newsletter for 03/16/2016

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 21.99%.

Chart for QQQ

The DIA options at strike $173.00 for April 8 2016 are offering a 1.13% return, which annualizes at a rate of 17.19%.

Chart for DIA

The SPY options at strike $202.50 for April 8 2016 are offering a 1.10% return, which annualizes at a rate of 16.73%.

Chart for SPY


Technology Focus: Income Opportunities

An April covered call on QCOM at strike $52.50 using 300 shares is offering an income potential of $273. In May, a strike 52.50 covered call offers $639 in premium.

The annualized return by writing covered calls in April is 20.46% and in May is 23.44%.

Chart for QCOM

A March covered call on BABA at strike $72.50 using 300 shares is offering an income potential of $282. In April, a strike 72.50 covered call offers $834 and in July, a strike 72.50 covered call offers $1,755 in premium.

The annualized return by writing covered calls in March is 120.32%, in April is 45.66% and in July is 26.15%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on EOG at strike $74.00 using 300 shares is offering an income potential of $285. In April, a strike 75.00 covered call offers $720 and in July, a strike 75.00 covered call offers $1,695 in premium.

The annualized return by writing covered calls in March is 119.31%, in April is 38.44% and in July is 24.67%.

Chart for EOG

A March covered call on HAL at strike $35.00 using 300 shares is offering an income potential of $138. In April, a strike 35.00 covered call offers $387 and in May, a strike 35.00 covered call offers $618 in premium.

The annualized return by writing covered calls in March is 121.56%, in April is 43.66% and in May is 34.08%.

Chart for HAL


Healthcare Focus: Income Opportunities

A March covered call on GILD at strike $89.50 using 300 shares is offering an income potential of $267. In April, a strike 90.00 covered call offers $759 and in May, a strike 90.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in March is 91.71%, in April is 33.20% and in May is 25.17%.

Chart for GILD

A March covered call on HCA at strike $73.50 using 300 shares is offering an income potential of $195. In April, a strike 75.00 covered call offers $480 and in June, a strike 75.00 covered call offers $960 in premium.

The annualized return by writing covered calls in March is 81.79%, in April is 25.50% and in June is 17.57%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A July covered call on PEP at strike $105.00 using 300 shares is offering an income potential of $393.

The annualized return by writing covered calls in July is 3.89%.

Chart for PEP

A March covered call on WBA at strike $81.50 using 300 shares is offering an income potential of $174. In April, a strike 82.50 covered call offers $597 and in June, a strike 82.50 covered call offers $990 in premium.

The annualized return by writing covered calls in March is 65.55%, in April is 28.61% and in June is 16.25%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A March covered call on AMZN at strike $577.50 using 300 shares is offering an income potential of $1,920. In April, a strike 580.00 covered call offers $5,280 and in May, a strike 580.00 covered call offers $10,260 in premium.

The annualized return by writing covered calls in March is 102.34%, in April is 35.89% and in May is 34.32%.

Chart for AMZN

A March covered call on CBS at strike $53.00 using 300 shares is offering an income potential of $195. In April, a strike 55.00 covered call offers $207 and in June, a strike 55.00 covered call offers $585 in premium.

The annualized return by writing covered calls in March is 114.19%, in April is 15.16% and in June is 14.79%.

Chart for CBS


Financials Focus: Income Opportunities

An April covered call on BAC at strike $14.00 using 300 shares is offering an income potential of $105. In May, a strike 14.00 covered call offers $162 in premium.

The annualized return by writing covered calls in April is 30.20% and in May is 22.58%.

Chart for BAC

A March covered call on AXP at strike $59.50 using 300 shares is offering an income potential of $114. In April, a strike 60.00 covered call offers $336 and in July, a strike 60.00 covered call offers $792 in premium.

The annualized return by writing covered calls in March is 58.92%, in April is 21.98% and in July is 13.84%.

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 $87. In April, a strike 82.50 covered call offers $336 and in May, a strike 82.50 covered call offers $693 in premium.

The annualized return by writing covered calls in March is 33.14%, in April is 16.16% and in May is 16.17%.

Chart for UNP

An April covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $135. In June, a strike 11.00 covered call offers $315 in premium.

The annualized return by writing covered calls in April is 51.79% and in June is 43.33%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on LYB at strike $85.00 using 300 shares is offering an income potential of $225. In April, a strike 85.00 covered call offers $765 and in June, a strike 85.00 covered call offers $1,380 in premium.

The annualized return by writing covered calls in March is 81.99%, in April is 35.61% and in June is 22.20%.

Chart for LYB

A March covered call on NEM at strike $26.50 using 300 shares is offering an income potential of $126. In April, a strike 27.00 covered call offers $318 and in May, a strike 27.00 covered call offers $525 in premium.

The annualized return by writing covered calls in March is 147.69%, in April is 47.77% and in May is 38.72%.

Chart for NEM


Utilities Focus: Income Opportunities

An April covered call on D at strike $75.00 using 300 shares is offering an income potential of $120. In July, a strike 75.00 covered call offers $390 in premium.

The annualized return by writing covered calls in April is 6.29% and in July is 5.38%.

Chart for D

An April covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $195. In July, a strike 80.00 covered call offers $465 in premium.

The annualized return by writing covered calls in April is 9.58% and in July is 6.01%.

Chart for DUK


Telecommunications Focus: Income Opportunities

An April covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $225. In July, a strike 32.00 covered call offers $510 in premium.

The annualized return by writing covered calls in April is 27.98% and in July is 17.03%.

Chart for CTL

An April covered call on VOD at strike $32.00 using 300 shares is offering an income potential of $126. In July, a strike 32.00 covered call offers $306 in premium.

The annualized return by writing covered calls in April is 15.52% and in July is 10.00%.

Chart for VOD

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

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