Income Alerts Newsletter for 12/09/2016

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 30 2016 are offering a 1.01% return, which annualizes at a rate of 16.68%.

Chart for QQQ

The DIA options at strike $196.50 for January 6 2017 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for DIA

The SPY options at strike $225.50 for December 28 2016 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for SPY


Technology Focus: Income Opportunities

A December covered call on GOOG at strike $777.50 using 300 shares is offering an income potential of $2,040. In January, a strike 780.00 covered call offers $4,830 and in February, a strike 780.00 covered call offers $8,220 in premium.

The annualized return by writing covered calls in December is 35.83%, in January is 17.57% and in February is 18.54%.

Chart for GOOG

A December covered call on PCLN at strike $1592.50 using 300 shares is offering an income potential of $210. In January, a strike 1710.00 covered call offers $285 and in February, a strike 1580.00 covered call offers $8,010 in premium.

The annualized return by writing covered calls in December is 2.06%, in January is 0.52% and in February is 9.02%.

Chart for PCLN


Energy Focus: Income Opportunities

A December covered call on APC at strike $70.50 using 300 shares is offering an income potential of $381. In January, a strike 72.50 covered call offers $624 and in February, a strike 72.50 covered call offers $960 in premium.

The annualized return by writing covered calls in December is 74.66%, in January is 25.31% and in February is 24.19%.

Chart for APC

A December covered call on EOG at strike $105.00 using 300 shares is offering an income potential of $525. In January, a strike 105.00 covered call offers $1,200 and in April, a strike 105.00 covered call offers $2,325 in premium.

The annualized return by writing covered calls in December is 68.78%, in January is 32.88% and in April is 21.56%.

Chart for EOG


Healthcare Focus: Income Opportunities

A February covered call on MCK at strike $165.00 using 300 shares is offering an income potential of $300.

The annualized return by writing covered calls in February is 3.61%.

Chart for MCK

A December covered call on HCA at strike $76.00 using 300 shares is offering an income potential of $105. In January, a strike 105.00 covered call offers $150 and in March, a strike 82.50 covered call offers $255 in premium.

The annualized return by writing covered calls in December is 22.12%, in January is 5.89% and in March is 4.37%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A December covered call on KO at strike $41.00 using 300 shares is offering an income potential of $120. In January, a strike 41.00 covered call offers $234 and in February, a strike 41.00 covered call offers $348 in premium.

The annualized return by writing covered calls in December is 39.98%, in January is 16.10% and in February is 14.77%.

Chart for KO

A March covered call on ADM at strike $55.00 using 300 shares is offering an income potential of $93.

The annualized return by writing covered calls in March is 2.50%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A December covered call on DG at strike $77.00 using 300 shares is offering an income potential of $255. In January, a strike 77.50 covered call offers $540 and in February, a strike 77.50 covered call offers $720 in premium.

The annualized return by writing covered calls in December is 45.32%, in January is 19.88% and in February is 16.33%.

Chart for DG

A January covered call on FOXA at strike $29.00 using 300 shares is offering an income potential of $165. In April, a strike 29.00 covered call offers $390 in premium.

The annualized return by writing covered calls in January is 16.24% and in April is 12.86%.

Chart for FOXA


Financials Focus: Income Opportunities

A December covered call on MS at strike $44.00 using 300 shares is offering an income potential of $165. In January, a strike 44.00 covered call offers $465 and in February, a strike 44.00 covered call offers $591 in premium.

The annualized return by writing covered calls in December is 51.84%, in January is 30.59% and in February is 24.00%.

Chart for MS

A December covered call on GS at strike $242.50 using 300 shares is offering an income potential of $1,260. In January, a strike 245.00 covered call offers $2,370 and in April, a strike 245.00 covered call offers $4,290 in premium.

The annualized return by writing covered calls in December is 71.79%, in January is 28.06% and in April is 17.02%.

Chart for GS


Industrials Focus: Income Opportunities

A December covered call on UNP at strike $106.00 using 300 shares is offering an income potential of $300. In January, a strike 110.00 covered call offers $432 and in February, a strike 110.00 covered call offers $672 in premium.

The annualized return by writing covered calls in December is 38.86%, in January is 11.49% and in February is 11.01%.

Chart for UNP

A December covered call on UPS at strike $119.00 using 300 shares is offering an income potential of $270. In January, a strike 120.00 covered call offers $543 and in April, a strike 120.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in December is 30.91%, in January is 12.81% and in April is 8.19%.

Chart for UPS


Materials Focus: Income Opportunities

A December covered call on NEM at strike $34.00 using 300 shares is offering an income potential of $249. In January, a strike 34.00 covered call offers $582 and in February, a strike 34.00 covered call offers $756 in premium.

The annualized return by writing covered calls in December is 101.88%, in January is 50.40% and in February is 40.75%.

Chart for NEM

A December covered call on DOW at strike $57.50 using 300 shares is offering an income potential of $237. In January, a strike 57.50 covered call offers $501 and in March, a strike 57.50 covered call offers $828 in premium.

The annualized return by writing covered calls in December is 56.57%, in January is 24.84% and in March is 18.43%.

Chart for DOW


Utilities Focus: Income Opportunities

A February covered call on ED at strike $82.50 using 300 shares is offering an income potential of $90.

The annualized return by writing covered calls in February is 2.19%.

Chart for ED

A March covered call on NEE at strike $145.00 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in March is 1.27%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A January covered call on VOD at strike $39.00 using 300 shares is offering an income potential of $96.

The annualized return by writing covered calls in January is 10.99%.

Chart for VOD

A December covered call on VZ at strike $51.50 using 300 shares is offering an income potential of $105. In January, a strike 52.50 covered call offers $126 and in February, a strike 52.50 covered call offers $204 in premium.

The annualized return by writing covered calls in December is 27.95%, in January is 6.87% and in February is 6.83%.

Chart for VZ

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

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