Income Alerts Newsletter for 12/13/2016

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 January 6 2017 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for QQQ

The DIA options at strike $198.50 for January 6 2017 are offering a 0.89% return, which annualizes at a rate of 13.01%.

Chart for DIA

The SPY options at strike $226.50 for January 4 2017 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 QCOM at strike $68.50 using 300 shares is offering an income potential of $192. In January, a strike 70.00 covered call offers $339 and in February, a strike 70.00 covered call offers $678 in premium.

The annualized return by writing covered calls in December is 68.88%, in January is 15.31% and in February is 18.32%.

Chart for QCOM

A December covered call on AAPL at strike $114.00 using 300 shares is offering an income potential of $165. In January, a strike 115.00 covered call offers $540 and in February, a strike 115.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in December is 35.61%, in January is 14.73% and in February is 16.86%.

Chart for AAPL


Energy Focus: Income Opportunities

A December covered call on EOG at strike $106.00 using 300 shares is offering an income potential of $486. In January, a strike 110.00 covered call offers $546 and in April, a strike 110.00 covered call offers $1,770 in premium.

The annualized return by writing covered calls in December is 113.48%, in January is 15.97% and in April is 16.45%.

Chart for EOG

A December covered call on HAL at strike $54.50 using 300 shares is offering an income potential of $222. In January, a strike 55.00 covered call offers $510 and in February, a strike 55.00 covered call offers $783 in premium.

The annualized return by writing covered calls in December is 100.50%, in January is 29.39% and in February is 27.00%.

Chart for HAL


Healthcare Focus: Income Opportunities

A December covered call on PFE at strike $32.50 using 300 shares is offering an income potential of $90. In January, a strike 33.00 covered call offers $168 and in February, a strike 33.00 covered call offers $249 in premium.

The annualized return by writing covered calls in December is 68.22%, in January is 16.05% and in February is 14.11%.

Chart for PFE

A December covered call on MCK at strike $149.00 using 300 shares is offering an income potential of $210. In January, a strike 155.00 covered call offers $465 and in February, a strike 150.00 covered call offers $1,590 in premium.

The annualized return by writing covered calls in December is 43.81%, in January is 10.01% and in February is 20.45%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A December covered call on KO at strike $42.00 using 300 shares is offering an income potential of $75. In January, a strike 42.00 covered call offers $228 and in February, a strike 42.00 covered call offers $330 in premium.

The annualized return by writing covered calls in December is 43.82%, in January is 16.86% and in February is 14.47%.

Chart for KO

A December covered call on CVS at strike $81.50 using 300 shares is offering an income potential of $192.

The annualized return by writing covered calls in December is 73.84%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A December covered call on DG at strike $76.50 using 300 shares is offering an income potential of $375. In January, a strike 82.50 covered call offers $105 and in February, a strike 82.50 covered call offers $210 in premium.

The annualized return by writing covered calls in December is 152.16%, in January is 4.32% and in February is 5.05%.

Chart for DG

A February covered call on HD at strike $160.00 using 300 shares is offering an income potential of $174.

The annualized return by writing covered calls in February is 2.36%.

Chart for HD


Financials Focus: Income Opportunities

A December covered call on MET at strike $57.00 using 300 shares is offering an income potential of $171. In January, a strike 57.50 covered call offers $504 and in February, a strike 57.50 covered call offers $735 in premium.

The annualized return by writing covered calls in December is 74.25%, in January is 27.91% and in February is 24.28%.

Chart for MET

A January covered call on MS at strike $49.00 using 300 shares is offering an income potential of $78.

The annualized return by writing covered calls in January is 5.70%.

Chart for MS


Industrials Focus: Income Opportunities

A February covered call on UNP at strike $120.00 using 300 shares is offering an income potential of $105.

The annualized return by writing covered calls in February is 1.83%.

Chart for UNP

A December covered call on UTX at strike $111.00 using 300 shares is offering an income potential of $240. In January, a strike 115.00 covered call offers $255 and in February, a strike 115.00 covered call offers $420 in premium.

The annualized return by writing covered calls in December is 53.29%, in January is 7.08% and in February is 6.89%.

Chart for UTX


Materials Focus: Income Opportunities

A December covered call on MON at strike $105.00 using 300 shares is offering an income potential of $75. In January, a strike 105.00 covered call offers $450 and in April, a strike 105.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in December is 17.49%, in January is 13.28% and in April is 11.08%.

Chart for MON

A December covered call on FCX at strike $15.50 using 300 shares is offering an income potential of $90. In January, a strike 16.00 covered call offers $231 and in February, a strike 16.00 covered call offers $348 in premium.

The annualized return by writing covered calls in December is 145.42%, in January is 48.16% and in February is 43.85%.

Chart for FCX


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 2.25%.

Chart for ED

A January covered call on NEE at strike $125.00 using 300 shares is offering an income potential of $75. In March, a strike 145.00 covered call offers $120 in premium.

The annualized return by writing covered calls in January is 2.00% and in March is 1.31%.

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. In April, a strike 27.00 covered call offers $174 in premium.

The annualized return by writing covered calls in January is 12.12% and in April is 6.66%.

Chart for VOD

A December covered call on SBAC at strike $100.00 using 300 shares is offering an income potential of $240. In January, a strike 100.00 covered call offers $825 and in March, a strike 100.00 covered call offers $1,470 in premium.

The annualized return by writing covered calls in December is 59.02%, in January is 25.87% and in March is 19.64%.

Chart for SBAC

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

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