Income Alerts Newsletter for 11/17/2016

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 $117.00 for December 9 2016 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for QQQ

The DIA options at strike $189.00 for December 17 2016 are offering a 1.18% return, which annualizes at a rate of 13.87%.

Chart for DIA

The SPY options at strike $218.00 for December 7 2016 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for SPY


Technology Focus: Income Opportunities

A November covered call on PCLN at strike $1505.00 using 300 shares is offering an income potential of $2,850. In December, a strike 1505.00 covered call offers $11,190 and in January, a strike 1505.00 covered call offers $16,350 in premium.

The annualized return by writing covered calls in November is 77.38%, in December is 29.96% and in January is 20.80%.

Chart for PCLN


Energy Focus: Income Opportunities

A January covered call on HES at strike $92.50 using 300 shares is offering an income potential of $141.

The annualized return by writing covered calls in January is 5.24%.

Chart for HES

A November covered call on APC at strike $62.50 using 300 shares is offering an income potential of $135. In December, a strike 62.50 covered call offers $732 and in January, a strike 62.50 covered call offers $1,035 in premium.

The annualized return by writing covered calls in November is 89.04%, in December is 48.28% and in January is 32.62%.

Chart for APC


Healthcare Focus: Income Opportunities

A November covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $96. In December, a strike 65.00 covered call offers $102 and in January, a strike 65.00 covered call offers $243 in premium.

The annualized return by writing covered calls in November is 62.48%, in December is 6.43% and in January is 7.25%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A November covered call on WBA at strike $83.50 using 300 shares is offering an income potential of $123. In December, a strike 85.00 covered call offers $378 and in January, a strike 85.00 covered call offers $771 in premium.

The annualized return by writing covered calls in November is 60.26%, in December is 18.11% and in January is 17.63%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A November covered call on HD at strike $126.00 using 300 shares is offering an income potential of $96. In December, a strike 130.00 covered call offers $216 and in January, a strike 130.00 covered call offers $513 in premium.

The annualized return by writing covered calls in November is 31.14%, in December is 6.80% and in January is 7.65%.

Chart for HD

A January covered call on DG at strike $115.00 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in January is 2.95%.

Chart for DG


Industrials Focus: Income Opportunities

A November covered call on UPS at strike $113.00 using 300 shares is offering an income potential of $117. In December, a strike 115.00 covered call offers $276 and in January, a strike 115.00 covered call offers $516 in premium.

The annualized return by writing covered calls in November is 42.21%, in December is 9.68% and in January is 8.56%.

Chart for UPS

A December covered call on DHR at strike $92.50 using 300 shares is offering an income potential of $2,820. In January, a strike 92.50 covered call offers $3,000 in premium.

The annualized return by writing covered calls in December is 161.51% and in January is 79.98%.

Chart for DHR


Materials Focus: Income Opportunities

A January covered call on MON at strike $105.00 using 300 shares is offering an income potential of $318.

The annualized return by writing covered calls in January is 5.88%.

Chart for MON

A December covered call on FCX at strike $14.00 using 300 shares is offering an income potential of $225. In January, a strike 14.00 covered call offers $330 in premium.

The annualized return by writing covered calls in December is 67.67% and in January is 47.90%.

Chart for FCX


Utilities Focus: Income Opportunities

A January covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $105.

The annualized return by writing covered calls in January is 8.46%.

Chart for CNP

A December covered call on NRG at strike $12.00 using 300 shares is offering an income potential of $255. In January, a strike 12.00 covered call offers $165 in premium.

The annualized return by writing covered calls in December is 96.79% and in January is 28.59%.

Chart for NRG


Telecommunications Focus: Income Opportunities

A December covered call on LVLT at strike $57.50 using 300 shares is offering an income potential of $120. In January, a strike 57.50 covered call offers $285 in premium.

The annualized return by writing covered calls in December is 8.62% and in January is 9.72%.

Chart for LVLT

A November covered call on TMUS at strike $53.50 using 300 shares is offering an income potential of $114.

The annualized return by writing covered calls in November is 132.47%.

Chart for TMUS

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

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