Income Alerts Newsletter for 12/05/2016

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 $192.00 for December 30 2016 are offering a 1.04% return, which annualizes at a rate of 15.23%.

Chart for DIA


Energy Focus: Income Opportunities

A December covered call on OXY at strike $71.00 using 300 shares is offering an income potential of $234. In January, a strike 72.50 covered call offers $381 and in February, a strike 72.50 covered call offers $594 in premium.

The annualized return by writing covered calls in December is 27.09%, in January is 13.32% and in February is 13.45%.

Chart for OXY

A December covered call on SLB at strike $85.00 using 300 shares is offering an income potential of $330. In January, a strike 85.00 covered call offers $729 and in February, a strike 85.00 covered call offers $915 in premium.

The annualized return by writing covered calls in December is 40.11%, in January is 22.99% and in February is 18.22%.

Chart for SLB


Healthcare Focus: Income Opportunities

A December covered call on MCK at strike $144.00 using 300 shares is offering an income potential of $750. In January, a strike 145.00 covered call offers $1,290 and in February, a strike 145.00 covered call offers $2,010 in premium.

The annualized return by writing covered calls in December is 43.13%, in January is 22.54% and in February is 22.91%.

Chart for MCK

A December covered call on ESRX at strike $76.00 using 300 shares is offering an income potential of $408. In January, a strike 77.50 covered call offers $534 and in February, a strike 77.50 covered call offers $816 in premium.

The annualized return by writing covered calls in December is 44.54%, in January is 17.59% and in February is 17.45%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

A December covered call on CVS at strike $78.00 using 300 shares is offering an income potential of $348. In January, a strike 80.00 covered call offers $369 and in February, a strike 80.00 covered call offers $630 in premium.

The annualized return by writing covered calls in December is 46.15%, in January is 12.50% and in February is 13.53%.

Chart for CVS

A December covered call on ADM at strike $44.50 using 300 shares is offering an income potential of $162. In January, a strike 45.00 covered call offers $297 and in March, a strike 45.00 covered call offers $534 in premium.

The annualized return by writing covered calls in December is 37.79%, in January is 17.88% and in March is 14.94%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A December covered call on CBS at strike $60.50 using 300 shares is offering an income potential of $234. In January, a strike 62.50 covered call offers $270 and in March, a strike 62.50 covered call offers $570 in premium.

The annualized return by writing covered calls in December is 39.94%, in January is 11.79% and in March is 11.55%.

Chart for CBS

A December covered call on CMCSA at strike $69.00 using 300 shares is offering an income potential of $288. In January, a strike 70.00 covered call offers $390 and in April, a strike 70.00 covered call offers $855 in premium.

The annualized return by writing covered calls in December is 43.06%, in January is 14.96% and in April is 11.43%.

Chart for CMCSA


Financials Focus: Income Opportunities

A December covered call on BAC at strike $21.50 using 300 shares is offering an income potential of $105. In January, a strike 22.00 covered call offers $168 and in February, a strike 22.00 covered call offers $240 in premium.

The annualized return by writing covered calls in December is 50.99%, in January is 21.04% and in February is 19.06%.

Chart for BAC

A December covered call on GS at strike $225.00 using 300 shares is offering an income potential of $1,110. In January, a strike 225.00 covered call offers $2,130 and in April, a strike 225.00 covered call offers $3,960 in premium.

The annualized return by writing covered calls in December is 40.99%, in January is 23.97% and in April is 16.26%.

Chart for GS


Industrials Focus: Income Opportunities

A December covered call on GE at strike $31.50 using 300 shares is offering an income potential of $84. In January, a strike 32.00 covered call offers $114 and in February, a strike 32.00 covered call offers $165 in premium.

The annualized return by writing covered calls in December is 27.42%, in January is 9.53% and in February is 8.69%.

Chart for GE

A December covered call on UTX at strike $109.00 using 300 shares is offering an income potential of $267. In January, a strike 110.00 covered call offers $480 and in February, a strike 110.00 covered call offers $723 in premium.

The annualized return by writing covered calls in December is 25.22%, in January is 11.65% and in February is 11.08%.

Chart for UTX


Materials Focus: Income Opportunities

A December covered call on MON at strike $104.00 using 300 shares is offering an income potential of $243. In January, a strike 105.00 covered call offers $450 and in April, a strike 105.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in December is 23.90%, in January is 11.37% and in April is 8.81%.

Chart for MON

A December covered call on NEM at strike $34.00 using 300 shares is offering an income potential of $288. In January, a strike 34.00 covered call offers $582 and in February, a strike 34.00 covered call offers $762 in premium.

The annualized return by writing covered calls in December is 89.52%, in January is 47.62% and in February is 39.82%.

Chart for NEM


Utilities Focus: Income Opportunities

A January covered call on CNP at strike $25.00 using 300 shares is offering an income potential of $75. In February, a strike 25.00 covered call offers $120 in premium.

The annualized return by writing covered calls in January is 8.14% and in February is 8.21%.

Chart for CNP

A December covered call on D at strike $75.00 using 300 shares is offering an income potential of $165. In January, a strike 75.00 covered call offers $375 and in April, a strike 75.00 covered call offers $720 in premium.

The annualized return by writing covered calls in December is 22.84%, in January is 13.38% and in April is 8.89%.

Chart for D


Telecommunications Focus: Income Opportunities

A December covered call on VZ at strike $50.00 using 300 shares is offering an income potential of $165. In January, a strike 50.00 covered call offers $282 and in February, a strike 50.00 covered call offers $369 in premium.

The annualized return by writing covered calls in December is 27.17%, in January is 14.04% and in February is 11.85%.

Chart for VZ

A December covered call on T at strike $39.00 using 300 shares is offering an income potential of $84. In January, a strike 39.00 covered call offers $168 and in February, a strike 39.00 covered call offers $243 in premium.

The annualized return by writing covered calls in December is 22.22%, in January is 11.43% and in February is 10.43%.

Chart for T

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

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