Income Alerts Newsletter for 12/12/2016

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 $120.00 for January 6 2017 are offering a 1.00% return, which annualizes at a rate of 14.56%.

Chart for QQQ

The DIA options at strike $198.00 for January 6 2017 are offering a 0.92% return, which annualizes at a rate of 13.49%.

Chart for DIA


Technology Focus: Income Opportunities

A December covered call on QCOM at strike $69.00 using 300 shares is offering an income potential of $165. In January, a strike 70.00 covered call offers $381 and in February, a strike 70.00 covered call offers $705 in premium.

The annualized return by writing covered calls in December is 59.07%, in January is 17.23% and in February is 19.06%.

Chart for QCOM

A December covered call on FB at strike $120.00 using 300 shares is offering an income potential of $312. In January, a strike 120.00 covered call offers $915 and in February, a strike 120.00 covered call offers $1,620 in premium.

The annualized return by writing covered calls in December is 63.99%, in January is 23.86% and in February is 25.36%.

Chart for FB


Energy Focus: Income Opportunities

A December covered call on APC at strike $70.50 using 300 shares is offering an income potential of $393. In January, a strike 72.50 covered call offers $621 and in February, a strike 72.50 covered call offers $975 in premium.

The annualized return by writing covered calls in December is 138.37%, in January is 27.64% and in February is 25.97%.

Chart for APC

A December covered call on EOG at strike $107.00 using 300 shares is offering an income potential of $420. In January, a strike 110.00 covered call offers $702 and in April, a strike 110.00 covered call offers $1,845 in premium.

The annualized return by writing covered calls in December is 97.29%, in January is 20.51% and in April is 17.08%.

Chart for EOG


Healthcare Focus: Income Opportunities

A January covered call on PFE at strike $32.00 using 300 shares is offering an income potential of $201. In February, a strike 32.00 covered call offers $267 in premium.

The annualized return by writing covered calls in January is 19.70% and in February is 15.51%.

Chart for PFE

A December covered call on MCK at strike $147.00 using 300 shares is offering an income potential of $435. In January, a strike 150.00 covered call offers $930 and in February, a strike 150.00 covered call offers $1,590 in premium.

The annualized return by writing covered calls in December is 45.69%, in January is 18.38% and in February is 19.33%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A January covered call on KO at strike $43.00 using 300 shares is offering an income potential of $120. In February, a strike 43.00 covered call offers $207 in premium.

The annualized return by writing covered calls in January is 8.77% and in February is 8.97%.

Chart for KO

A December covered call on CVS at strike $80.50 using 300 shares is offering an income potential of $306. In January, a strike 82.50 covered call offers $381 and in February, a strike 85.00 covered call offers $390 in premium.

The annualized return by writing covered calls in December is 94.12%, in January is 14.70% and in February is 8.85%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A December covered call on DG at strike $77.50 using 300 shares is offering an income potential of $225. In January, a strike 77.50 covered call offers $570 and in February, a strike 77.50 covered call offers $750 in premium.

The annualized return by writing covered calls in December is 44.76%, in January is 21.42% and in February is 17.20%.

Chart for DG

A January covered call on FOXA at strike $29.00 using 300 shares is offering an income potential of $150. In April, a strike 29.00 covered call offers $330 in premium.

The annualized return by writing covered calls in January is 16.47% and in April is 11.31%.

Chart for FOXA


Financials Focus: Income Opportunities

A December covered call on BAC at strike $23.50 using 300 shares is offering an income potential of $78. In January, a strike 24.00 covered call offers $171 and in February, a strike 24.00 covered call offers $249 in premium.

The annualized return by writing covered calls in December is 83.14%, in January is 23.10% and in February is 20.01%.

Chart for BAC

A December covered call on JPM at strike $86.00 using 300 shares is offering an income potential of $210. In January, a strike 87.50 covered call offers $462 and in February, a strike 87.50 covered call offers $675 in premium.

The annualized return by writing covered calls in December is 37.67%, in January is 15.57% and in February is 13.90%.

Chart for JPM


Industrials Focus: Income Opportunities

A January covered call on GE at strike $32.00 using 300 shares is offering an income potential of $150. In February, a strike 32.00 covered call offers $204 in premium.

The annualized return by writing covered calls in January is 14.59% and in February is 11.74%.

Chart for GE

A December covered call on UNP at strike $105.00 using 300 shares is offering an income potential of $372. In January, a strike 105.00 covered call offers $975 and in February, a strike 105.00 covered call offers $1,245 in premium.

The annualized return by writing covered calls in December is 87.25%, in January is 29.15% and in February is 22.09%.

Chart for UNP


Materials Focus: Income Opportunities

A December covered call on MON at strike $105.00 using 300 shares is offering an income potential of $120. In January, a strike 105.00 covered call offers $480 and in April, a strike 105.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in December is 17.52%, in January is 13.19% and in April is 10.83%.

Chart for MON

A December covered call on DOW at strike $58.00 using 300 shares is offering an income potential of $174. In January, a strike 60.00 covered call offers $231 and in March, a strike 60.00 covered call offers $504 in premium.

The annualized return by writing covered calls in December is 74.11%, in January is 12.34% and in March is 11.40%.

Chart for DOW


Utilities Focus: Income Opportunities

A January covered call on ED at strike $72.50 using 300 shares is offering an income potential of $345. In February, a strike 72.50 covered call offers $450 in premium.

The annualized return by writing covered calls in January is 14.93% and in February is 11.51%.

Chart for ED

A January covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $375. In March, a strike 120.00 covered call offers $795 in premium.

The annualized return by writing covered calls in January is 9.21% and in March is 8.58%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A January covered call on VOD at strike $26.00 using 300 shares is offering an income potential of $123. In April, a strike 26.00 covered call offers $294 in premium.

The annualized return by writing covered calls in January is 15.09% and in April is 11.27%.

Chart for VOD

A December covered call on VZ at strike $51.50 using 300 shares is offering an income potential of $132. In January, a strike 52.50 covered call offers $150 and in February, a strike 52.50 covered call offers $237 in premium.

The annualized return by writing covered calls in December is 62.92%, in January is 8.95% and in February is 8.36%.

Chart for VZ

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

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