Income Alerts Newsletter for 03/17/2016

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 $108.00 for April 8 2016 are offering a 0.99% return, which annualizes at a rate of 15.64%.

Chart for QQQ

The DIA options at strike $173.50 for April 8 2016 are offering a 1.07% return, which annualizes at a rate of 17.01%.

Chart for DIA

The SPY options at strike $203.50 for April 8 2016 are offering a 0.94% return, which annualizes at a rate of 14.97%.

Chart for SPY


Technology Focus: Income Opportunities

A March covered call on QCOM at strike $51.50 using 300 shares is offering an income potential of $75. In April, a strike 52.50 covered call offers $252 and in May, a strike 52.50 covered call offers $573 in premium.

The annualized return by writing covered calls in March is 59.58%, in April is 19.60% and in May is 21.39%.

Chart for QCOM

A March covered call on BABA at strike $74.00 using 300 shares is offering an income potential of $159. In April, a strike 75.00 covered call offers $594 and in July, a strike 75.00 covered call offers $1,500 in premium.

The annualized return by writing covered calls in March is 88.37%, in April is 32.60% and in July is 21.84%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on EOG at strike $75.50 using 300 shares is offering an income potential of $240. In April, a strike 77.50 covered call offers $633 and in July, a strike 77.50 covered call offers $1,545 in premium.

The annualized return by writing covered calls in March is 131.11%, in April is 34.06% and in July is 22.05%.

Chart for EOG

A March covered call on HAL at strike $35.50 using 300 shares is offering an income potential of $102. In April, a strike 36.00 covered call offers $303 and in May, a strike 36.00 covered call offers $480 in premium.

The annualized return by writing covered calls in March is 117.75%, in April is 34.51% and in May is 26.12%.

Chart for HAL


Healthcare Focus: Income Opportunities

A March covered call on GILD at strike $90.50 using 300 shares is offering an income potential of $177. In April, a strike 92.50 covered call offers $489 and in May, a strike 92.50 covered call offers $900 in premium.

The annualized return by writing covered calls in March is 80.03%, in April is 21.65% and in May is 19.01%.

Chart for GILD

A March covered call on HCA at strike $74.50 using 300 shares is offering an income potential of $180. In April, a strike 75.00 covered call offers $465 and in June, a strike 75.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in March is 98.80%, in April is 25.02% and in June is 19.14%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A March covered call on PEP at strike $101.00 using 300 shares is offering an income potential of $90. In July, a strike 105.00 covered call offers $345 in premium.

The annualized return by writing covered calls in March is 36.31% and in July is 3.45%.

Chart for PEP

A March covered call on WBA at strike $82.50 using 300 shares is offering an income potential of $105. In April, a strike 82.50 covered call offers $696 and in June, a strike 82.50 covered call offers $1,095 in premium.

The annualized return by writing covered calls in March is 52.09%, in April is 34.24% and in June is 18.07%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A March covered call on AMZN at strike $575.00 using 300 shares is offering an income potential of $1,335. In April, a strike 575.00 covered call offers $5,085 and in May, a strike 575.00 covered call offers $10,170 in premium.

The annualized return by writing covered calls in March is 95.02%, in April is 35.81% and in May is 34.69%.

Chart for AMZN

A March covered call on CBS at strike $54.50 using 300 shares is offering an income potential of $129. In April, a strike 55.00 covered call offers $363 and in June, a strike 55.00 covered call offers $804 in premium.

The annualized return by writing covered calls in March is 96.86%, in April is 26.76% and in June is 20.11%.

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 $72. In May, a strike 14.00 covered call offers $126 in premium.

The annualized return by writing covered calls in April is 21.62% and in May is 18.02%.

Chart for BAC

A March covered call on AXP at strike $60.00 using 300 shares is offering an income potential of $75. In April, a strike 60.00 covered call offers $366 and in July, a strike 60.00 covered call offers $828 in premium.

The annualized return by writing covered calls in March is 51.16%, in April is 24.56% and in July is 14.50%.

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 $150. In April, a strike 82.50 covered call offers $309 and in May, a strike 82.50 covered call offers $678 in premium.

The annualized return by writing covered calls in March is 76.22%, in April is 15.30% and in May is 16.01%.

Chart for UNP

An April covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $150. In June, a strike 11.00 covered call offers $330 in premium.

The annualized return by writing covered calls in April is 58.75% and in June is 45.34%.

Chart for HTZ


Materials Focus: Income Opportunities

A March covered call on LYB at strike $87.50 using 300 shares is offering an income potential of $120. In April, a strike 87.50 covered call offers $675 and in June, a strike 87.50 covered call offers $1,290 in premium.

The annualized return by writing covered calls in March is 56.64%, in April is 31.51% and in June is 20.35%.

Chart for LYB

A March covered call on NEM at strike $28.00 using 300 shares is offering an income potential of $78. In April, a strike 28.00 covered call offers $147 and in May, a strike 28.00 covered call offers $297 in premium.

The annualized return by writing covered calls in March is 115.92%, in April is 21.32% and in May is 20.61%.

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 $150. In July, a strike 75.00 covered call offers $480 in premium.

The annualized return by writing covered calls in April is 8.06% and in July is 6.65%.

Chart for D

An April covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $165. In July, a strike 80.00 covered call offers $585 in premium.

The annualized return by writing covered calls in April is 8.26% and in July is 7.58%.

Chart for DUK


Telecommunications Focus: Income Opportunities

An April covered call on CTL at strike $33.00 using 300 shares is offering an income potential of $165. In July, a strike 33.00 covered call offers $465 in premium.

The annualized return by writing covered calls in April is 20.48% and in July is 15.14%.

Chart for CTL

An April covered call on VOD at strike $32.00 using 300 shares is offering an income potential of $141. In July, a strike 32.00 covered call offers $330 in premium.

The annualized return by writing covered calls in April is 17.82% and in July is 10.81%.

Chart for VOD

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

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