Income Alerts Newsletter for 11/21/2016

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 DIA options at strike $188.50 for December 23 2016 are offering a 1.33% return, which annualizes at a rate of 15.21%.

Chart for DIA

The SPY options at strike $219.00 for December 14 2016 are offering a 1.03% return, which annualizes at a rate of 16.36%.

Chart for SPY


Technology Focus: Income Opportunities

A December covered call on QCOM at strike $67.50 using 300 shares is offering an income potential of $375. In January, a strike 67.50 covered call offers $588 and in March, a strike 67.50 covered call offers $960 in premium.

The annualized return by writing covered calls in December is 23.82%, in January is 17.11% and in March is 15.18%.

Chart for QCOM

A December covered call on PCLN at strike $1510.00 using 300 shares is offering an income potential of $9,300. In January, a strike 1510.00 covered call offers $14,850 and in April, a strike 1510.00 covered call offers $28,860 in premium.

The annualized return by writing covered calls in December is 29.48%, in January is 20.32% and in April is 16.37%.

Chart for PCLN


Energy Focus: Income Opportunities

A December covered call on HES at strike $52.50 using 300 shares is offering an income potential of $483. In January, a strike 52.50 covered call offers $756 and in February, a strike 52.50 covered call offers $930 in premium.

The annualized return by writing covered calls in December is 45.79%, in January is 31.12% and in February is 26.56%.

Chart for HES

A December covered call on SLB at strike $82.50 using 300 shares is offering an income potential of $240. In January, a strike 82.50 covered call offers $537 and in February, a strike 82.50 covered call offers $681 in premium.

The annualized return by writing covered calls in December is 14.18%, in January is 13.69% and in February is 11.98%.

Chart for SLB


Healthcare Focus: Income Opportunities

A December covered call on ESRX at strike $77.50 using 300 shares is offering an income potential of $363. In January, a strike 77.50 covered call offers $690 and in February, a strike 77.50 covered call offers $945 in premium.

The annualized return by writing covered calls in December is 20.43%, in January is 17.85% and in February is 17.21%.

Chart for ESRX

A December covered call on MRK at strike $62.50 using 300 shares is offering an income potential of $240. In January, a strike 62.50 covered call offers $408 and in April, a strike 62.50 covered call offers $759 in premium.

The annualized return by writing covered calls in December is 18.39%, in January is 13.45% and in April is 10.24%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A December covered call on WBA at strike $85.00 using 300 shares is offering an income potential of $369. In January, a strike 85.00 covered call offers $786 and in April, a strike 85.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in December is 21.05%, in January is 19.44% and in April is 13.08%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A December covered call on HD at strike $130.00 using 300 shares is offering an income potential of $390. In January, a strike 130.00 covered call offers $774 and in February, a strike 130.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in December is 14.37%, in January is 12.28% and in February is 11.33%.

Chart for HD

A December covered call on DG at strike $77.50 using 300 shares is offering an income potential of $810. In January, a strike 77.50 covered call offers $930 and in February, a strike 77.50 covered call offers $1,050 in premium.

The annualized return by writing covered calls in December is 45.82%, in January is 23.97% and in February is 18.93%.

Chart for DG


Financials Focus: Income Opportunities

A January covered call on BAC at strike $21.00 using 300 shares is offering an income potential of $138. In February, a strike 21.00 covered call offers $195 in premium.

The annualized return by writing covered calls in January is 14.09% and in February is 13.78%.

Chart for BAC

A December covered call on MET at strike $55.00 using 300 shares is offering an income potential of $414. In January, a strike 55.00 covered call offers $705 and in March, a strike 55.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in December is 32.51%, in January is 25.55% and in March is 19.80%.

Chart for MET


Industrials Focus: Income Opportunities

A December covered call on GE at strike $31.00 using 300 shares is offering an income potential of $90. In January, a strike 31.00 covered call offers $168 and in February, a strike 31.00 covered call offers $222 in premium.

The annualized return by writing covered calls in December is 13.87%, in January is 11.13% and in February is 10.14%.

Chart for GE

A December covered call on UTX at strike $110.00 using 300 shares is offering an income potential of $153. In January, a strike 110.00 covered call offers $423 and in February, a strike 110.00 covered call offers $600 in premium.

The annualized return by writing covered calls in December is 6.75%, in January is 8.03% and in February is 7.85%.

Chart for UTX


Materials Focus: Income Opportunities

A December covered call on MON at strike $105.00 using 300 shares is offering an income potential of $75. In January, a strike 105.00 covered call offers $252 and in April, a strike 105.00 covered call offers $870 in premium.

The annualized return by writing covered calls in December is 3.12%, in January is 4.77% and in April is 6.95%.

Chart for MON

A December covered call on CF at strike $30.00 using 300 shares is offering an income potential of $339. In January, a strike 29.00 covered call offers $696 and in February, a strike 30.00 covered call offers $711 in premium.

The annualized return by writing covered calls in December is 51.10%, in January is 49.67% and in February is 35.36%.

Chart for CF


Utilities Focus: Income Opportunities

A January covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $135. In February, a strike 24.00 covered call offers $165 in premium.

The annualized return by writing covered calls in January is 11.76% and in February is 9.90%.

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 $180 and in March, a strike 12.00 covered call offers $285 in premium.

The annualized return by writing covered calls in December is 103.27%, in January is 32.25% and in March is 28.16%.

Chart for NRG


Telecommunications Focus: Income Opportunities

A December covered call on VZ at strike $49.00 using 300 shares is offering an income potential of $120. In January, a strike 49.00 covered call offers $204 and in February, a strike 50.00 covered call offers $174 in premium.

The annualized return by writing covered calls in December is 11.78%, in January is 8.59% and in February is 5.01%.

Chart for VZ

A December covered call on T at strike $38.00 using 300 shares is offering an income potential of $126. In January, a strike 38.00 covered call offers $192 and in February, a strike 38.00 covered call offers $255 in premium.

The annualized return by writing covered calls in December is 15.88%, in January is 10.37% and in February is 9.50%.

Chart for T

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

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