Income Alerts Newsletter for 12/07/2016

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 $117.00 for December 30 2016 are offering a 1.15% return, which annualizes at a rate of 17.51%.

Chart for QQQ

The DIA options at strike $192.50 for December 30 2016 are offering a 0.88% return, which annualizes at a rate of 13.31%.

Chart for DIA

The SPY options at strike $222.00 for December 28 2016 are offering a 0.59% return, which annualizes at a rate of 9.86%.

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 $285. In January, a strike 67.50 covered call offers $615 and in February, a strike 67.50 covered call offers $930 in premium.

The annualized return by writing covered calls in December is 47.40%, in January is 24.87% and in February is 23.76%.

Chart for QCOM

A December covered call on PCLN at strike $1505.00 using 300 shares is offering an income potential of $5,100. In January, a strike 1505.00 covered call offers $9,240 and in February, a strike 1505.00 covered call offers $15,840 in premium.

The annualized return by writing covered calls in December is 37.91%, in January is 16.58% and in February is 17.94%.

Chart for PCLN


Energy Focus: Income Opportunities

A December covered call on OXY at strike $70.50 using 300 shares is offering an income potential of $186. In January, a strike 72.50 covered call offers $291 and in February, a strike 72.50 covered call offers $558 in premium.

The annualized return by writing covered calls in December is 29.48%, in January is 11.08% and in February is 13.38%.

Chart for OXY

A December covered call on SLB at strike $84.00 using 300 shares is offering an income potential of $348. In January, a strike 85.00 covered call offers $630 and in February, a strike 85.00 covered call offers $810 in premium.

The annualized return by writing covered calls in December is 46.49%, in January is 20.36% and in February is 16.39%.

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 $465. In January, a strike 150.00 covered call offers $705 and in February, a strike 150.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in December is 35.75%, in January is 13.04% and in February is 15.75%.

Chart for MCK

A December covered call on ESRX at strike $77.00 using 300 shares is offering an income potential of $363. In January, a strike 77.50 covered call offers $642 and in February, a strike 77.50 covered call offers $915 in premium.

The annualized return by writing covered calls in December is 53.16%, in January is 22.77% and in February is 20.42%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

A December covered call on CVS at strike $79.50 using 300 shares is offering an income potential of $393. In January, a strike 80.00 covered call offers $588 and in February, a strike 80.00 covered call offers $855 in premium.

The annualized return by writing covered calls in December is 55.65%, in January is 20.08% and in February is 18.36%.

Chart for CVS

A December covered call on ADM at strike $45.00 using 300 shares is offering an income potential of $117. In January, a strike 45.00 covered call offers $351 and in March, a strike 45.00 covered call offers $597 in premium.

The annualized return by writing covered calls in December is 29.22%, in January is 21.34% and in March is 16.68%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A December covered call on CBS at strike $61.50 using 300 shares is offering an income potential of $174. In January, a strike 62.50 covered call offers $345 and in March, a strike 62.50 covered call offers $660 in premium.

The annualized return by writing covered calls in December is 31.77%, in January is 15.21% and in March is 13.35%.

Chart for CBS

A December covered call on CMCSA at strike $69.00 using 300 shares is offering an income potential of $210. In January, a strike 70.00 covered call offers $339 and in April, a strike 70.00 covered call offers $807 in premium.

The annualized return by writing covered calls in December is 34.16%, in January is 13.27% and in April is 10.86%.

Chart for CMCSA


Financials Focus: Income Opportunities

A December covered call on BAC at strike $22.50 using 300 shares is offering an income potential of $72. In January, a strike 23.00 covered call offers $141 and in February, a strike 23.00 covered call offers $222 in premium.

The annualized return by writing covered calls in December is 36.33%, in January is 17.19% and in February is 17.04%.

Chart for BAC

A December covered call on GS at strike $232.50 using 300 shares is offering an income potential of $945. In January, a strike 235.00 covered call offers $1,845 and in April, a strike 235.00 covered call offers $3,705 in premium.

The annualized return by writing covered calls in December is 45.80%, in January is 21.67% and in April is 15.02%.

Chart for GS


Industrials Focus: Income Opportunities

A January covered call on GE at strike $32.00 using 300 shares is offering an income potential of $87. In February, a strike 32.00 covered call offers $138 in premium.

The annualized return by writing covered calls in January is 7.45% and in February is 7.39%.

Chart for GE

A December covered call on UTX at strike $108.00 using 300 shares is offering an income potential of $246. In January, a strike 110.00 covered call offers $342 and in February, a strike 110.00 covered call offers $576 in premium.

The annualized return by writing covered calls in December is 25.52%, in January is 8.51% and in February is 8.98%.

Chart for UTX


Materials Focus: Income Opportunities

A December covered call on MON at strike $106.00 using 300 shares is offering an income potential of $120. In January, a strike 110.00 covered call offers $168 and in April, a strike 110.00 covered call offers $654 in premium.

The annualized return by writing covered calls in December is 12.59%, in January is 4.22% and in April is 5.61%.

Chart for MON

A December covered call on CF at strike $29.00 using 300 shares is offering an income potential of $201. In January, a strike 29.00 covered call offers $432 and in February, a strike 30.00 covered call offers $477 in premium.

The annualized return by writing covered calls in December is 79.68%, in January is 42.12% and in February is 29.07%.

Chart for CF


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 $150 and in February, a strike 24.00 covered call offers $210 in premium.

The annualized return by writing covered calls in December is 56.77%, in January is 17.04% and in February is 14.96%.

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 $195 and in March, a strike 12.00 covered call offers $300 in premium.

The annualized return by writing covered calls in December is 257.11%, in January is 46.17% and in March is 33.07%.

Chart for NRG


Telecommunications Focus: Income Opportunities

A December covered call on VZ at strike $50.50 using 300 shares is offering an income potential of $138. In February, a strike 52.50 covered call offers $138 in premium.

The annualized return by writing covered calls in December is 30.59% and in February is 4.55%.

Chart for VZ

A December covered call on T at strike $39.50 using 300 shares is offering an income potential of $87. In January, a strike 40.00 covered call offers $126 and in February, a strike 40.00 covered call offers $204 in premium.

The annualized return by writing covered calls in December is 24.64%, in January is 8.56% and in February is 8.67%.

Chart for T

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

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