Income Alerts Newsletter for 03/22/2016

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 16 2016 are offering a 1.46% return, which annualizes at a rate of 20.48%.

Chart for QQQ

The DIA options at strike $176.50 for April 22 2016 are offering a 0.36% return, which annualizes at a rate of 4.10%.

Chart for DIA

The SPY options at strike $205.00 for April 16 2016 are offering a 1.16% return, which annualizes at a rate of 16.31%.

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 $291. In May, a strike 52.50 covered call offers $645 and in July, a strike 52.50 covered call offers $765 in premium.

The annualized return by writing covered calls in April is 26.58%, in May is 25.70% and in July is 16.02%.

Chart for QCOM

An April covered call on BABA at strike $80.00 using 300 shares is offering an income potential of $423. In July, a strike 80.00 covered call offers $1,365 and in October, a strike 80.00 covered call offers $1,995 in premium.

The annualized return by writing covered calls in April is 25.81%, in July is 19.30% and in October is 15.80%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on EOG at strike $77.50 using 300 shares is offering an income potential of $618. In July, a strike 77.50 covered call offers $1,515 and in October, a strike 77.50 covered call offers $2,145 in premium.

The annualized return by writing covered calls in April is 39.13%, in July is 22.22% and in October is 17.64%.

Chart for EOG

An April covered call on HAL at strike $37.00 using 300 shares is offering an income potential of $243. In May, a strike 37.00 covered call offers $486 and in July, a strike 37.00 covered call offers $630 in premium.

The annualized return by writing covered calls in April is 31.97%, in May is 27.89% and in July is 19.11%.

Chart for HAL


Healthcare Focus: Income Opportunities

A May covered call on PFE at strike $31.00 using 300 shares is offering an income potential of $135. In June, a strike 31.00 covered call offers $180 in premium.

The annualized return by writing covered calls in May is 9.09% and in June is 8.35%.

Chart for PFE

An April covered call on GILD at strike $95.00 using 300 shares is offering an income potential of $381. In May, a strike 95.00 covered call offers $855 and in August, a strike 95.00 covered call offers $1,455 in premium.

The annualized return by writing covered calls in April is 19.51%, in May is 18.99% and in August is 13.26%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A July covered call on PEP at strike $105.00 using 300 shares is offering an income potential of $360. In October, a strike 105.00 covered call offers $663 in premium.

The annualized return by writing covered calls in July is 3.73% and in October is 3.78%.

Chart for PEP

An April covered call on WBA at strike $85.00 using 300 shares is offering an income potential of $468. In June, a strike 85.00 covered call offers $849 and in July, a strike 85.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in April is 26.71%, in June is 14.38% and in July is 13.64%.

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 $267. In June, a strike 55.00 covered call offers $675 and in September, a strike 55.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in April is 23.52%, in June is 17.82% and in September is 14.05%.

Chart for CBS

An April covered call on CMCSA at strike $60.00 using 300 shares is offering an income potential of $270. In July, a strike 60.00 covered call offers $714 and in October, a strike 60.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in April is 21.44%, in July is 12.92% and in October is 10.23%.

Chart for CMCSA


Financials Focus: Income Opportunities

An April covered call on BAC at strike $14.00 using 300 shares is offering an income potential of $111. In May, a strike 14.00 covered call offers $174 and in June, a strike 14.00 covered call offers $204 in premium.

The annualized return by writing covered calls in April is 38.56%, in May is 26.17% and in June is 21.19%.

Chart for BAC

An April covered call on AXP at strike $62.50 using 300 shares is offering an income potential of $177. In July, a strike 62.50 covered call offers $636 and in October, a strike 62.50 covered call offers $975 in premium.

The annualized return by writing covered calls in April is 13.66%, in July is 11.19% and in October is 9.52%.

Chart for AXP


Industrials Focus: Income Opportunities

An April covered call on UNP at strike $85.00 using 300 shares is offering an income potential of $408. In May, a strike 85.00 covered call offers $816 and in August, a strike 85.00 covered call offers $1,320 in premium.

The annualized return by writing covered calls in April is 23.11%, in May is 20.03% and in August is 13.28%.

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 and in September, a strike 12.00 covered call offers $450 in premium.

The annualized return by writing covered calls in April is 44.83%, in June is 37.61% and in September is 31.01%.

Chart for HTZ


Materials Focus: Income Opportunities

An April covered call on LYB at strike $87.50 using 300 shares is offering an income potential of $585. In June, a strike 87.50 covered call offers $1,200 and in September, a strike 87.50 covered call offers $1,770 in premium.

The annualized return by writing covered calls in April is 32.49%, in June is 19.96% and in September is 14.90%.

Chart for LYB

An April covered call on NEM at strike $28.00 using 300 shares is offering an income potential of $312. In May, a strike 28.00 covered call offers $534 and in June, a strike 28.00 covered call offers $651 in premium.

The annualized return by writing covered calls in April is 54.58%, in May is 40.95% and in June is 34.74%.

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 $525 and in October, a strike 75.00 covered call offers $690 in premium.

The annualized return by writing covered calls in April is 9.60%, in July is 7.60% and in October is 5.47%.

Chart for D

An April covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $285. In July, a strike 80.00 covered call offers $645 and in October, a strike 80.00 covered call offers $870 in premium.

The annualized return by writing covered calls in April is 16.97%, in July is 8.67% and in October is 6.43%.

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 $195. In July, a strike 32.00 covered call offers $495 and in October, a strike 32.00 covered call offers $645 in premium.

The annualized return by writing covered calls in April is 29.39%, in July is 17.13% and in October is 12.35%.

Chart for CTL

An April covered call on VOD at strike $32.00 using 300 shares is offering an income potential of $105. In July, a strike 32.00 covered call offers $294 and in October, a strike 32.00 covered call offers $414 in premium.

The annualized return by writing covered calls in April is 15.80%, in July is 10.04% and in October is 7.79%.

Chart for VOD

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

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