Income Alerts Newsletter for 12/06/2016

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 $192.50 for December 30 2016 are offering a 0.84% return, which annualizes at a rate of 12.25%.

Chart for DIA

The SPY options at strike $221.50 for December 28 2016 are offering a 0.69% return, which annualizes at a rate of 10.99%.

Chart for SPY


Technology Focus: Income Opportunities

A December covered call on PCLN at strike $1500.00 using 300 shares is offering an income potential of $6,330. In January, a strike 1500.00 covered call offers $12,720 and in February, a strike 1500.00 covered call offers $20,190 in premium.

The annualized return by writing covered calls in December is 43.40%, in January is 22.59% and in February is 22.86%.

Chart for PCLN

A December covered call on GOOG at strike $765.00 using 300 shares is offering an income potential of $2,490. In January, a strike 765.00 covered call offers $5,220 and in February, a strike 765.00 covered call offers $8,790 in premium.

The annualized return by writing covered calls in December is 33.47%, in January is 18.14% and in February is 19.45%.

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. In February, a strike 80.00 covered call offers $87 in premium.

The annualized return by writing covered calls in January is 23.01% and in February is 2.02%.

Chart for OXY

A February covered call on SLB at strike $95.00 using 300 shares is offering an income potential of $93.

The annualized return by writing covered calls in February is 1.82%.

Chart for SLB


Healthcare Focus: Income Opportunities

A December covered call on MCK at strike $146.00 using 300 shares is offering an income potential of $390. In January, a strike 155.00 covered call offers $330 and in February, a strike 150.00 covered call offers $1,380 in premium.

The annualized return by writing covered calls in December is 30.02%, in January is 6.07% and in February is 16.16%.

Chart for MCK

A February covered call on ESRX at strike $87.50 using 300 shares is offering an income potential of $93.

The annualized return by writing covered calls in February is 2.00%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

A December covered call on ADM at strike $44.00 using 300 shares is offering an income potential of $183. In January, a strike 44.00 covered call offers $393 and in March, a strike 44.00 covered call offers $636 in premium.

The annualized return by writing covered calls in December is 42.86%, in January is 23.89% and in March is 17.98%.

Chart for ADM

An April covered call on WBA at strike $100.00 using 300 shares is offering an income potential of $186.

The annualized return by writing covered calls in April is 1.96%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A December covered call on CBS at strike $61.50 using 300 shares is offering an income potential of $129.

The annualized return by writing covered calls in December is 23.56%.

Chart for CBS

A December covered call on CMCSA at strike $71.00 using 300 shares is offering an income potential of $93. In April, a strike 80.00 covered call offers $102 in premium.

The annualized return by writing covered calls in December is 15.05% and in April is 1.33%.

Chart for CMCSA


Financials Focus: Income Opportunities

A February covered call on MS at strike $47.00 using 300 shares is offering an income potential of $132.

The annualized return by writing covered calls in February is 5.21%.

Chart for MS

An April covered call on AXP at strike $85.00 using 300 shares is offering an income potential of $132.

The annualized return by writing covered calls in April is 1.64%.

Chart for AXP


Industrials Focus: Income Opportunities

A December covered call on UTX at strike $111.00 using 300 shares is offering an income potential of $87. In February, a strike 115.00 covered call offers $231 in premium.

The annualized return by writing covered calls in December is 8.98% and in February is 3.56%.

Chart for UTX

A December covered call on UNP at strike $107.00 using 300 shares is offering an income potential of $93.

The annualized return by writing covered calls in December is 10.03%.

Chart for UNP


Materials Focus: Income Opportunities

A December covered call on CF at strike $29.00 using 300 shares is offering an income potential of $198. In January, a strike 29.00 covered call offers $438 and in February, a strike 30.00 covered call offers $483 in premium.

The annualized return by writing covered calls in December is 71.90%, in January is 41.81% and in February is 29.05%.

Chart for CF

A December covered call on DOW at strike $56.50 using 300 shares is offering an income potential of $207. In January, a strike 57.50 covered call offers $321 and in March, a strike 57.50 covered call offers $585 in premium.

The annualized return by writing covered calls in December is 37.90%, in January is 15.11% and in March is 12.77%.

Chart for DOW


Utilities Focus: Income Opportunities

A December covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $120. In January, a strike 24.00 covered call offers $195 and in February, a strike 24.00 covered call offers $240 in premium.

The annualized return by writing covered calls in December is 56.29%, in January is 22.11% and in February is 17.02%.

Chart for CNP

An April covered call on D at strike $75.00 using 300 shares is offering an income potential of $720.

The annualized return by writing covered calls in April is 9.00%.

Chart for D


Telecommunications Focus: Income Opportunities

A December covered call on LVLT at strike $57.50 using 300 shares is offering an income potential of $90. In January, a strike 57.50 covered call offers $300 and in March, a strike 57.50 covered call offers $600 in premium.

The annualized return by writing covered calls in December is 16.35%, in January is 14.09% and in March is 13.10%.

Chart for LVLT

A December covered call on TMUS at strike $56.50 using 300 shares is offering an income potential of $108.

The annualized return by writing covered calls in December is 21.85%.

Chart for TMUS

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

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