Income Alerts Newsletter for 11/22/2016

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 $119.00 for December 17 2016 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for QQQ

The DIA options at strike $189.50 for December 17 2016 are offering a 0.99% return, which annualizes at a rate of 13.85%.

Chart for DIA

The SPY options at strike $220.50 for December 14 2016 are offering a 0.88% return, which annualizes at a rate of 13.89%.

Chart for SPY


Technology Focus: Income Opportunities

A December covered call on FB at strike $122.00 using 300 shares is offering an income potential of $774. In January, a strike 125.00 covered call offers $873 and in February, a strike 125.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in December is 30.39%, in January is 14.65% and in February is 16.83%.

Chart for FB

A December covered call on GOOG at strike $885.00 using 300 shares is offering an income potential of $150. In January, a strike 870.00 covered call offers $615 and in February, a strike 790.00 covered call offers $6,240 in premium.

The annualized return by writing covered calls in December is 0.95%, in January is 1.63% and in February is 11.53%.

Chart for GOOG


Energy Focus: Income Opportunities

A January covered call on OXY at strike $97.50 using 300 shares is offering an income potential of $600.

The annualized return by writing covered calls in January is 18.10%.

Chart for OXY

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 5.46%.

Chart for HES


Healthcare Focus: Income Opportunities

A January covered call on MCK at strike $145.00 using 300 shares is offering an income potential of $1,050. In February, a strike 155.00 covered call offers $750 in premium.

The annualized return by writing covered calls in January is 15.45% and in February is 7.47%.

Chart for MCK

A January covered call on ESRX at strike $82.50 using 300 shares is offering an income potential of $213.

The annualized return by writing covered calls in January is 5.73%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

An April covered call on WBA at strike $85.00 using 300 shares is offering an income potential of $1,395.

The annualized return by writing covered calls in April is 14.09%.

Chart for WBA

A January covered call on STZ at strike $185.00 using 300 shares is offering an income potential of $90. In April, a strike 185.00 covered call offers $480 in premium.

The annualized return by writing covered calls in January is 1.16% and in April is 2.48%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A February covered call on HD at strike $160.00 using 300 shares is offering an income potential of $174.

The annualized return by writing covered calls in February is 1.88%.

Chart for HD

A December covered call on DG at strike $77.00 using 300 shares is offering an income potential of $720. In January, a strike 77.50 covered call offers $855 and in February, a strike 77.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in December is 45.32%, in January is 23.08% and in February is 19.01%.

Chart for DG


Financials Focus: Income Opportunities

A December covered call on BAC at strike $20.50 using 300 shares is offering an income potential of $117. In January, a strike 21.00 covered call offers $162 and in February, a strike 21.00 covered call offers $222 in premium.

The annualized return by writing covered calls in December is 27.46%, in January is 16.33% and in February is 15.49%.

Chart for BAC

A December covered call on MS at strike $41.00 using 300 shares is offering an income potential of $207. In January, a strike 41.00 covered call offers $426 in premium.

The annualized return by writing covered calls in December is 25.27% and in January is 22.07%.

Chart for MS


Industrials Focus: Income Opportunities

A December covered call on GE at strike $31.00 using 300 shares is offering an income potential of $102. In January, a strike 31.00 covered call offers $183 and in February, a strike 31.00 covered call offers $234 in premium.

The annualized return by writing covered calls in December is 15.63%, in January is 12.06% and in February is 10.63%.

Chart for GE

A December covered call on DHR at strike $80.00 using 300 shares is offering an income potential of $270. In January, a strike 80.00 covered call offers $465 and in March, a strike 80.00 covered call offers $780 in premium.

The annualized return by writing covered calls in December is 16.13%, in January is 11.94% and in March is 10.59%.

Chart for DHR


Materials Focus: Income Opportunities

An April covered call on MON at strike $115.00 using 300 shares is offering an income potential of $201.

The annualized return by writing covered calls in April is 1.61%.

Chart for MON

A December covered call on CF at strike $30.00 using 300 shares is offering an income potential of $402. In January, a strike 30.00 covered call offers $621 and in February, a strike 30.00 covered call offers $810 in premium.

The annualized return by writing covered calls in December is 65.94%, in January is 44.55% and in February is 40.75%.

Chart for CF


Utilities Focus: Income Opportunities

An April covered call on D at strike $80.00 using 300 shares is offering an income potential of $75.

The annualized return by writing covered calls in April is 0.84%.

Chart for D

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 13.00 covered call offers $180 in premium.

The annualized return by writing covered calls in December is 116.31%, in January is 33.42% and in March is 17.29%.

Chart for NRG


Telecommunications Focus: Income Opportunities

A December covered call on T at strike $38.00 using 300 shares is offering an income potential of $114. In January, a strike 38.00 covered call offers $192 and in February, a strike 38.00 covered call offers $264 in premium.

The annualized return by writing covered calls in December is 14.28%, in January is 10.32% and in February is 9.79%.

Chart for T

A March covered call on LVLT at strike $60.00 using 300 shares is offering an income potential of $390.

The annualized return by writing covered calls in March is 7.35%.

Chart for LVLT

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

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