Income Alerts Newsletter for 03/23/2016

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 $108.50 for April 16 2016 are offering a 1.36% return, which annualizes at a rate of 19.85%.

Chart for QQQ

The DIA options at strike $176.00 for April 16 2016 are offering a 1.07% return, which annualizes at a rate of 15.62%.

Chart for DIA

The SPY options at strike $205.00 for April 16 2016 are offering a 1.09% return, which annualizes at a rate of 15.95%.

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 $276. In May, a strike 52.50 covered call offers $651 and in June, a strike 52.50 covered call offers $678 in premium.

The annualized return by writing covered calls in April is 26.29%, in May is 26.48% and in June is 18.84%.

Chart for QCOM

An April covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $549. In May, a strike 80.00 covered call offers $1,035 and in July, a strike 80.00 covered call offers $1,335 in premium.

The annualized return by writing covered calls in April is 34.99%, in May is 28.08% and in July is 18.99%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on HES at strike $54.00 using 300 shares is offering an income potential of $627. In May, a strike 55.00 covered call offers $1,050 and in June, a strike 55.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in April is 59.12%, in May is 42.41% and in June is 32.03%.

Chart for HES

An April covered call on OXY at strike $70.00 using 300 shares is offering an income potential of $471. In May, a strike 70.00 covered call offers $834 and in August, a strike 70.00 covered call offers $1,320 in premium.

The annualized return by writing covered calls in April is 33.69%, in May is 25.31% and in August is 16.31%.

Chart for OXY


Healthcare Focus: Income Opportunities

An April covered call on PFE at strike $30.50 using 300 shares is offering an income potential of $135. In May, a strike 31.00 covered call offers $189 and in June, a strike 31.00 covered call offers $222 in premium.

The annualized return by writing covered calls in April is 21.95%, in May is 12.88% and in June is 10.36%.

Chart for PFE

An April covered call on GILD at strike $94.00 using 300 shares is offering an income potential of $591. In May, a strike 95.00 covered call offers $1,005 and in June, a strike 95.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in April is 31.35%, in May is 22.55% and in June is 17.53%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

An April covered call on ADM at strike $38.00 using 300 shares is offering an income potential of $243. In May, a strike 38.00 covered call offers $408 and in June, a strike 38.00 covered call offers $477 in premium.

The annualized return by writing covered calls in April is 32.14%, in May is 22.82% and in June is 18.31%.

Chart for ADM

An April covered call on CVS at strike $102.00 using 300 shares is offering an income potential of $444. In May, a strike 105.00 covered call offers $381 and in August, a strike 105.00 covered call offers $837 in premium.

The annualized return by writing covered calls in April is 21.51%, in May is 7.67% and in August is 6.80%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An April covered call on FOXA at strike $28.00 using 300 shares is offering an income potential of $165. In May, a strike 29.00 covered call offers $180 and in July, a strike 28.00 covered call offers $435 in premium.

The annualized return by writing covered calls in April is 29.30%, in May is 13.34% and in July is 17.21%.

Chart for FOXA

An April covered call on GM at strike $32.00 using 300 shares is offering an income potential of $237. In May, a strike 32.00 covered call offers $378 and in June, a strike 32.00 covered call offers $444 in premium.

The annualized return by writing covered calls in April is 37.07%, in May is 25.02% and in June is 20.18%.

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 $96. In May, a strike 14.00 covered call offers $165 and in June, a strike 14.00 covered call offers $192 in premium.

The annualized return by writing covered calls in April is 34.76%, in May is 25.33% and in June is 20.23%.

Chart for BAC

An April covered call on GS at strike $155.00 using 300 shares is offering an income potential of $1,005. In May, a strike 155.00 covered call offers $1,740 and in July, a strike 155.00 covered call offers $2,295 in premium.

The annualized return by writing covered calls in April is 32.42%, in May is 23.78% and in July is 16.43%.

Chart for GS


Industrials Focus: Income Opportunities

An April covered call on UNP at strike $82.50 using 300 shares is offering an income potential of $495. In May, a strike 82.50 covered call offers $897 and in August, a strike 82.50 covered call offers $1,350 in premium.

The annualized return by writing covered calls in April is 29.96%, in May is 23.00% and in August is 14.02%.

Chart for UNP

An April covered call on HTZ at strike $11.50 using 300 shares is offering an income potential of $135. In May, a strike 12.00 covered call offers $195 and in June, a strike 12.00 covered call offers $255 in premium.

The annualized return by writing covered calls in April is 61.40%, in May is 37.66% and in June is 34.23%.

Chart for HTZ


Materials Focus: Income Opportunities

An April covered call on FCX at strike $11.00 using 300 shares is offering an income potential of $264. In May, a strike 11.00 covered call offers $411 and in August, a strike 11.00 covered call offers $600 in premium.

The annualized return by writing covered calls in April is 127.08%, in May is 86.63% and in August is 53.78%.

Chart for FCX

An April covered call on HUN at strike $14.00 using 300 shares is offering an income potential of $90. In May, a strike 14.00 covered call offers $225 and in August, a strike 14.00 covered call offers $375 in premium.

The annualized return by writing covered calls in April is 33.90%, in May is 36.59% and in August is 25.24%.

Chart for HUN


Utilities Focus: Income Opportunities

An April covered call on ED at strike $75.00 using 300 shares is offering an income potential of $300. In May, a strike 75.00 covered call offers $510 and in August, a strike 75.00 covered call offers $750 in premium.

The annualized return by writing covered calls in April is 19.85%, in May is 14.19% and in August is 8.39%.

Chart for ED

An April covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $225. In May, a strike 120.00 covered call offers $540 and in June, a strike 120.00 covered call offers $735 in premium.

The annualized return by writing covered calls in April is 9.42%, in May is 9.50% and in June is 8.87%.

Chart for NEE


Telecommunications Focus: Income Opportunities

An April covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $165. In May, a strike 32.00 covered call offers $390 and in July, a strike 32.00 covered call offers $495 in premium.

The annualized return by writing covered calls in April is 25.84%, in May is 26.08% and in July is 17.32%.

Chart for CTL

An April covered call on VZ at strike $53.50 using 300 shares is offering an income potential of $117. In May, a strike 55.00 covered call offers $90 and in June, a strike 55.00 covered call offers $144 in premium.

The annualized return by writing covered calls in April is 10.78%, in May is 3.45% and in June is 3.78%.

Chart for VZ

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

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