Income Alerts Newsletter for 11/24/2016

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 $118.50 for December 17 2016 are offering a 1.15% return, which annualizes at a rate of 18.30%.

Chart for QQQ

The DIA options at strike $191.00 for December 17 2016 are offering a 0.91% return, which annualizes at a rate of 13.85%.

Chart for DIA

The SPY options at strike $221.00 for December 14 2016 are offering a 0.91% return, which annualizes at a rate of 15.81%.

Chart for SPY


Technology Focus: Income Opportunities

A December covered call on QCOM at strike $68.50 using 300 shares is offering an income potential of $288. In January, a strike 70.00 covered call offers $369 and in February, a strike 70.00 covered call offers $633 in premium.

The annualized return by writing covered calls in December is 22.68%, in January is 11.57% and in February is 13.56%.

Chart for QCOM

A December covered call on FB at strike $121.00 using 300 shares is offering an income potential of $729. In January, a strike 125.00 covered call offers $738 and in February, a strike 125.00 covered call offers $1,335 in premium.

The annualized return by writing covered calls in December is 32.57%, in January is 13.08% and in February is 16.23%.

Chart for FB


Energy Focus: Income Opportunities

A December covered call on OXY at strike $70.00 using 300 shares is offering an income potential of $381. In January, a strike 70.00 covered call offers $636 and in February, a strike 70.00 covered call offers $804 in premium.

The annualized return by writing covered calls in December is 28.16%, in January is 19.36% and in February is 16.74%.

Chart for OXY

A December covered call on SLB at strike $81.50 using 300 shares is offering an income potential of $432. In January, a strike 82.50 covered call offers $621 and in February, a strike 82.50 covered call offers $783 in premium.

The annualized return by writing covered calls in December is 28.58%, in January is 16.42% and in February is 14.06%.

Chart for SLB


Healthcare Focus: Income Opportunities

A December covered call on MCK at strike $142.00 using 300 shares is offering an income potential of $855. In January, a strike 145.00 covered call offers $990 and in February, a strike 145.00 covered call offers $1,650 in premium.

The annualized return by writing covered calls in December is 32.67%, in January is 15.05% and in February is 17.19%.

Chart for MCK

A December covered call on ESRX at strike $77.00 using 300 shares is offering an income potential of $486. In January, a strike 77.50 covered call offers $744 and in February, a strike 77.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in December is 34.19%, in January is 21.00% and in February is 19.66%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

A December covered call on WBA at strike $84.50 using 300 shares is offering an income potential of $414. In January, a strike 85.00 covered call offers $786 and in April, a strike 85.00 covered call offers $1,335 in premium.

The annualized return by writing covered calls in December is 26.49%, in January is 20.25% and in April is 13.69%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A December covered call on GM at strike $34.00 using 300 shares is offering an income potential of $150. In January, a strike 34.00 covered call offers $309 and in March, a strike 34.00 covered call offers $471 in premium.

The annualized return by writing covered calls in December is 22.79%, in January is 19.41% and in March is 15.43%.

Chart for GM

A December covered call on HD at strike $132.00 using 300 shares is offering an income potential of $429. In January, a strike 135.00 covered call offers $465 and in February, a strike 135.00 covered call offers $705 in premium.

The annualized return by writing covered calls in December is 17.49%, in January is 7.52% and in February is 7.74%.

Chart for HD


Financials Focus: Income Opportunities

A December covered call on BAC at strike $21.00 using 300 shares is offering an income potential of $78. In January, a strike 21.00 covered call offers $183 and in February, a strike 21.00 covered call offers $246 in premium.

The annualized return by writing covered calls in December is 20.33%, in January is 19.24% and in February is 17.63%.

Chart for BAC

A December covered call on MET at strike $55.50 using 300 shares is offering an income potential of $375. In January, a strike 57.50 covered call offers $399 and in February, a strike 57.50 covered call offers $585 in premium.

The annualized return by writing covered calls in December is 36.67%, in January is 15.49% and in February is 15.50%.

Chart for MET


Industrials Focus: Income Opportunities

A December covered call on GE at strike $31.50 using 300 shares is offering an income potential of $93. In January, a strike 32.00 covered call offers $120 and in February, a strike 32.00 covered call offers $168 in premium.

The annualized return by writing covered calls in December is 15.85%, in January is 8.14% and in February is 7.72%.

Chart for GE

A December covered call on UPS at strike $116.00 using 300 shares is offering an income potential of $384. In January, a strike 120.00 covered call offers $240 and in April, a strike 120.00 covered call offers $708 in premium.

The annualized return by writing covered calls in December is 17.76%, in January is 4.38% and in April is 5.10%.

Chart for UPS


Materials Focus: Income Opportunities

A December covered call on MON at strike $105.00 using 300 shares is offering an income potential of $111. In January, a strike 105.00 covered call offers $318 and in April, a strike 105.00 covered call offers $975 in premium.

The annualized return by writing covered calls in December is 5.75%, in January is 6.58% and in April is 8.03%.

Chart for MON

A December covered call on DOW at strike $54.50 using 300 shares is offering an income potential of $234. In January, a strike 55.00 covered call offers $294 and in March, a strike 55.00 covered call offers $564 in premium.

The annualized return by writing covered calls in December is 23.23%, in January is 11.62% and in March is 11.53%.

Chart for DOW


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 $180 in premium.

The annualized return by writing covered calls in January is 12.23% and in February is 11.07%.

Chart for CNP

A January covered call on D at strike $75.00 using 300 shares is offering an income potential of $195. In April, a strike 75.00 covered call offers $510 in premium.

The annualized return by writing covered calls in January is 5.66% and in April is 5.85%.

Chart for D


Telecommunications Focus: Income Opportunities

A December covered call on VZ at strike $50.50 using 300 shares is offering an income potential of $186. In January, a strike 52.50 covered call offers $90 and in February, a strike 52.50 covered call offers $153 in premium.

The annualized return by writing covered calls in December is 19.01%, in January is 3.72% and in February is 4.30%.

Chart for VZ

A December covered call on T at strike $39.00 using 300 shares is offering an income potential of $126. In January, a strike 39.00 covered call offers $192 and in February, a strike 39.00 covered call offers $267 in premium.

The annualized return by writing covered calls in December is 17.40%, in January is 10.57% and in February is 9.98%.

Chart for T

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

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