Income Alerts Newsletter for 03/18/2016

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 1.11% return, which annualizes at a rate of 18.41%.

Chart for QQQ

The DIA options at strike $175.00 for April 8 2016 are offering a 0.96% return, which annualizes at a rate of 15.89%.

Chart for DIA

The SPY options at strike $205.00 for April 8 2016 are offering a 0.82% return, which annualizes at a rate of 13.65%.

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 $240. In May, a strike 52.50 covered call offers $573 in premium.

The annualized return by writing covered calls in April is 19.24% and in May is 21.68%.

Chart for QCOM

A March covered call on BABA at strike $74.50 using 300 shares is offering an income potential of $90. In April, a strike 75.00 covered call offers $630 and in July, a strike 75.00 covered call offers $1,530 in premium.

The annualized return by writing covered calls in March is 74.04%, in April is 35.41% and in July is 22.25%.

Chart for BABA


Energy Focus: Income Opportunities

A March covered call on EOG at strike $77.00 using 300 shares is offering an income potential of $120. In April, a strike 77.50 covered call offers $783 and in July, a strike 77.50 covered call offers $1,755 in premium.

The annualized return by writing covered calls in March is 95.93%, in April is 42.98% and in July is 24.98%.

Chart for EOG

An April covered call on HAL at strike $37.00 using 300 shares is offering an income potential of $288. In May, a strike 37.00 covered call offers $495 in premium.

The annualized return by writing covered calls in April is 32.98% and in May is 26.68%.

Chart for HAL


Healthcare Focus: Income Opportunities

A March covered call on GILD at strike $90.00 using 300 shares is offering an income potential of $114. In April, a strike 90.00 covered call offers $681 and in May, a strike 90.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in March is 77.79%, in April is 31.65% and in May is 24.89%.

Chart for GILD

A March covered call on HCA at strike $74.00 using 300 shares is offering an income potential of $75. In April, a strike 75.00 covered call offers $450 and in June, a strike 75.00 covered call offers $960 in premium.

The annualized return by writing covered calls in March is 62.10%, in April is 25.27% and in June is 17.81%.

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 $432.

The annualized return by writing covered calls in July is 4.33%.

Chart for PEP

A March covered call on WBA at strike $83.50 using 300 shares is offering an income potential of $75. In April, a strike 85.00 covered call offers $447 and in June, a strike 85.00 covered call offers $867 in premium.

The annualized return by writing covered calls in March is 54.94%, in April is 22.16% and in June is 14.11%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

An April covered call on CBS at strike $55.00 using 300 shares is offering an income potential of $378. In June, a strike 55.00 covered call offers $765 in premium.

The annualized return by writing covered calls in April is 28.93% and in June is 19.36%.

Chart for CBS

An April covered call on CMCSA at strike $62.50 using 300 shares is offering an income potential of $123. In July, a strike 62.50 covered call offers $495 in premium.

The annualized return by writing covered calls in April is 8.27% and in July is 8.42%.

Chart for CMCSA


Financials Focus: Income Opportunities

A May covered call on BAC at strike $14.00 using 300 shares is offering an income potential of $126.

The annualized return by writing covered calls in May is 18.17%.

Chart for BAC

A March covered call on GS at strike $155.00 using 300 shares is offering an income potential of $75. In April, a strike 155.00 covered call offers $930 and in July, a strike 155.00 covered call offers $2,190 in premium.

The annualized return by writing covered calls in March is 29.89%, in April is 25.18% and in July is 15.12%.

Chart for GS


Industrials Focus: Income Opportunities

An April covered call on UNP at strike $85.00 using 300 shares is offering an income potential of $312. In May, a strike 85.00 covered call offers $717 in premium.

The annualized return by writing covered calls in April is 15.42% and in May is 16.63%.

Chart for UNP

An April covered call on HTZ at strike $12.00 using 300 shares is offering an income potential of $105. In June, a strike 12.00 covered call offers $285 in premium.

The annualized return by writing covered calls in April is 39.58% and in June is 36.70%.

Chart for HTZ


Materials Focus: Income Opportunities

An April covered call on LYB at strike $90.00 using 300 shares is offering an income potential of $630. In June, a strike 90.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in April is 29.54% and in June is 19.53%.

Chart for LYB

A March covered call on NEM at strike $27.50 using 300 shares is offering an income potential of $81. In April, a strike 28.00 covered call offers $327 and in May, a strike 28.00 covered call offers $537 in premium.

The annualized return by writing covered calls in March is 181.22%, in April is 50.29% and in May is 39.16%.

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 $195. In July, a strike 75.00 covered call offers $630 in premium.

The annualized return by writing covered calls in April is 10.70% and in July is 8.74%.

Chart for D

A March covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $75. In April, a strike 80.00 covered call offers $390 and in July, a strike 80.00 covered call offers $750 in premium.

The annualized return by writing covered calls in March is 57.22%, in April is 20.10% and in July is 9.73%.

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 $210. In July, a strike 32.00 covered call offers $480 in premium.

The annualized return by writing covered calls in April is 27.83% and in July is 16.25%.

Chart for CTL

An April covered call on VOD at strike $32.00 using 300 shares is offering an income potential of $192. In July, a strike 32.00 covered call offers $387 in premium.

The annualized return by writing covered calls in April is 24.87% and in July is 12.69%.

Chart for VOD

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

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