Income Alerts Newsletter for 03/24/2016

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 $107.50 for April 16 2016 are offering a 1.44% return, which annualizes at a rate of 21.87%.

Chart for QQQ

The DIA options at strike $175.00 for April 16 2016 are offering a 1.19% return, which annualizes at a rate of 18.14%.

Chart for DIA

The SPY options at strike $203.50 for April 16 2016 are offering a 1.27% return, which annualizes at a rate of 19.25%.

Chart for SPY


Technology Focus: Income Opportunities

An April covered call on QCOM at strike $51.00 using 300 shares is offering an income potential of $321. In May, a strike 52.50 covered call offers $471 and in June, a strike 52.50 covered call offers $528 in premium.

The annualized return by writing covered calls in April is 32.60%, in May is 19.65% and in June is 15.00%.

Chart for QCOM

An April covered call on BABA at strike $77.00 using 300 shares is offering an income potential of $591. In May, a strike 77.50 covered call offers $1,125 and in July, a strike 77.50 covered call offers $1,485 in premium.

The annualized return by writing covered calls in April is 40.17%, in May is 31.86% and in July is 21.94%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on HES at strike $52.50 using 300 shares is offering an income potential of $588. In May, a strike 52.50 covered call offers $1,035 and in June, a strike 52.50 covered call offers $1,140 in premium.

The annualized return by writing covered calls in April is 60.05%, in May is 44.33% and in June is 33.35%.

Chart for HES

An April covered call on SLB at strike $73.00 using 300 shares is offering an income potential of $546. In May, a strike 75.00 covered call offers $627 and in August, a strike 75.00 covered call offers $1,065 in premium.

The annualized return by writing covered calls in April is 38.91%, in May is 18.24% and in August is 12.45%.

Chart for SLB


Healthcare Focus: Income Opportunities

An April covered call on PFE at strike $30.50 using 300 shares is offering an income potential of $99. In May, a strike 31.00 covered call offers $156 and in June, a strike 31.00 covered call offers $192 in premium.

The annualized return by writing covered calls in April is 16.81%, in May is 10.84% and in June is 9.09%.

Chart for PFE

An April covered call on GILD at strike $90.50 using 300 shares is offering an income potential of $594. In May, a strike 92.50 covered call offers $828 and in June, a strike 92.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in April is 34.18%, in May is 19.55% and in June is 16.46%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

An April covered call on ADM at strike $37.00 using 300 shares is offering an income potential of $378. In May, a strike 38.00 covered call offers $276 and in June, a strike 37.00 covered call offers $474 in premium.

The annualized return by writing covered calls in April is 54.22%, in May is 15.95% and in June is 18.93%.

Chart for ADM

An April covered call on CVS at strike $102.00 using 300 shares is offering an income potential of $312. In May, a strike 105.00 covered call offers $273 and in August, a strike 105.00 covered call offers $672 in premium.

The annualized return by writing covered calls in April is 15.86%, in May is 5.64% and in August is 5.53%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An April covered call on AMZN at strike $570.00 using 300 shares is offering an income potential of $4,575. In May, a strike 570.00 covered call offers $9,960 and in June, a strike 570.00 covered call offers $11,295 in premium.

The annualized return by writing covered calls in April is 41.84%, in May is 38.29% and in June is 29.69%.

Chart for AMZN

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 $195 and in July, a strike 28.00 covered call offers $420 in premium.

The annualized return by writing covered calls in April is 30.71%, in May is 14.82% and in July is 16.84%.

Chart for FOXA


Financials Focus: Income Opportunities

A May covered call on BAC at strike $14.00 using 300 shares is offering an income potential of $141. In June, a strike 14.00 covered call offers $168 in premium.

The annualized return by writing covered calls in May is 22.11% and in June is 17.99%.

Chart for BAC

An April covered call on GS at strike $155.00 using 300 shares is offering an income potential of $960. In May, a strike 155.00 covered call offers $1,755 and in July, a strike 155.00 covered call offers $2,460 in premium.

The annualized return by writing covered calls in April is 32.26%, in May is 24.42% and in July is 17.84%.

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 $408. In May, a strike 82.50 covered call offers $816 and in August, a strike 82.50 covered call offers $1,275 in premium.

The annualized return by writing covered calls in April is 25.80%, in May is 21.35% and in August is 13.38%.

Chart for UNP

An April covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $105. In May, a strike 11.00 covered call offers $330 and in June, a strike 11.00 covered call offers $315 in premium.

The annualized return by writing covered calls in April is 52.39%, in May is 72.32% and in June is 46.57%.

Chart for HTZ


Materials Focus: Income Opportunities

An April covered call on FCX at strike $10.00 using 300 shares is offering an income potential of $198. In May, a strike 10.00 covered call offers $396 and in August, a strike 10.00 covered call offers $516 in premium.

The annualized return by writing covered calls in April is 110.42%, in May is 96.87% and in August is 52.12%.

Chart for FCX

An April covered call on HUN at strike $13.00 using 300 shares is offering an income potential of $135. In May, a strike 13.00 covered call offers $255 and in August, a strike 13.00 covered call offers $510 in premium.

The annualized return by writing covered calls in April is 56.37%, in May is 44.79% and in August is 37.99%.

Chart for HUN


Utilities Focus: Income Opportunities

An April covered call on ED at strike $77.50 using 300 shares is offering an income potential of $105. In May, a strike 77.50 covered call offers $300 and in August, a strike 77.50 covered call offers $420 in premium.

The annualized return by writing covered calls in April is 7.10%, in May is 8.32% and in August is 4.61%.

Chart for ED

An April covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $240. In May, a strike 120.00 covered call offers $600 and in June, a strike 120.00 covered call offers $735 in premium.

The annualized return by writing covered calls in April is 10.41%, in May is 10.69% and in June is 8.92%.

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 $105. In May, a strike 32.00 covered call offers $315 and in July, a strike 32.00 covered call offers $405 in premium.

The annualized return by writing covered calls in April is 17.36%, in May is 21.67% and in July is 14.44%.

Chart for CTL

An April covered call on VZ at strike $53.00 using 300 shares is offering an income potential of $156. In May, a strike 55.00 covered call offers $75 and in June, a strike 55.00 covered call offers $129 in premium.

The annualized return by writing covered calls in April is 15.10%, in May is 2.94% and in June is 3.44%.

Chart for VZ

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

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