Income Alerts Newsletter for 12/20/2016

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 $120.50 for January 13 2017 are offering a 1.16% return, which annualizes at a rate of 17.68%.

Chart for QQQ

The DIA options at strike $199.00 for January 13 2017 are offering a 0.92% return, which annualizes at a rate of 13.99%.

Chart for DIA

The SPY options at strike $226.00 for January 11 2017 are offering a 0.89% return, which annualizes at a rate of 14.84%.

Chart for SPY


Technology Focus: Income Opportunities

A January covered call on AAPL at strike $120.00 using 300 shares is offering an income potential of $270. In February, a strike 120.00 covered call offers $702 and in March, a strike 120.00 covered call offers $894 in premium.

The annualized return by writing covered calls in January is 8.87%, in February is 12.45% and in March is 10.87%.

Chart for AAPL

A January covered call on FB at strike $120.00 using 300 shares is offering an income potential of $735. In February, a strike 120.00 covered call offers $1,500 and in March, a strike 120.00 covered call offers $1,740 in premium.

The annualized return by writing covered calls in January is 23.20%, in February is 26.19% and in March is 20.97%.

Chart for FB


Energy Focus: Income Opportunities

A January covered call on APC at strike $71.50 using 300 shares is offering an income potential of $684. In February, a strike 72.50 covered call offers $930 and in May, a strike 72.50 covered call offers $1,650 in premium.

The annualized return by writing covered calls in January is 37.64%, in February is 27.62% and in May is 20.18%.

Chart for APC

A January covered call on HES at strike $63.50 using 300 shares is offering an income potential of $732. In February, a strike 65.00 covered call offers $900 and in March, a strike 65.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in January is 44.29%, in February is 29.73% and in March is 24.70%.

Chart for HES


Healthcare Focus: Income Opportunities

A January covered call on PFE at strike $33.00 using 300 shares is offering an income potential of $165. In February, a strike 33.00 covered call offers $249 and in March, a strike 33.00 covered call offers $300 in premium.

The annualized return by writing covered calls in January is 19.43%, in February is 15.78% and in March is 13.03%.

Chart for PFE

A January covered call on GILD at strike $75.00 using 300 shares is offering an income potential of $612. In February, a strike 75.00 covered call offers $900 and in March, a strike 75.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in January is 31.18%, in February is 25.14% and in March is 20.25%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A January covered call on KO at strike $42.00 using 300 shares is offering an income potential of $147. In February, a strike 42.00 covered call offers $264 and in March, a strike 42.00 covered call offers $315 in premium.

The annualized return by writing covered calls in January is 13.16%, in February is 12.91% and in March is 10.60%.

Chart for KO

A January covered call on PEP at strike $106.00 using 300 shares is offering an income potential of $405. In February, a strike 110.00 covered call offers $243 and in April, a strike 110.00 covered call offers $480 in premium.

The annualized return by writing covered calls in January is 14.80%, in February is 4.71% and in April is 4.57%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A January covered call on FOXA at strike $29.00 using 300 shares is offering an income potential of $105. In April, a strike 29.00 covered call offers $345 and in July, a strike 29.00 covered call offers $510 in premium.

The annualized return by writing covered calls in January is 13.94%, in April is 12.55% and in July is 10.92%.

Chart for FOXA

A January covered call on HD at strike $136.00 using 300 shares is offering an income potential of $708. In February, a strike 140.00 covered call offers $570 and in March, a strike 140.00 covered call offers $831 in premium.

The annualized return by writing covered calls in January is 19.61%, in February is 8.51% and in March is 8.56%.

Chart for HD


Financials Focus: Income Opportunities

A January covered call on BAC at strike $22.50 using 300 shares is offering an income potential of $231. In February, a strike 23.00 covered call offers $261 and in March, a strike 23.00 covered call offers $318 in premium.

The annualized return by writing covered calls in January is 39.23%, in February is 24.09% and in March is 20.30%.

Chart for BAC

A January covered call on MS at strike $43.00 using 300 shares is offering an income potential of $387. In February, a strike 43.00 covered call offers $534 and in March, a strike 43.00 covered call offers $648 in premium.

The annualized return by writing covered calls in January is 35.42%, in February is 26.38% and in March is 22.03%.

Chart for MS


Industrials Focus: Income Opportunities

A January covered call on UPS at strike $117.00 using 300 shares is offering an income potential of $642. In February, a strike 120.00 covered call offers $537 and in April, a strike 120.00 covered call offers $828 in premium.

The annualized return by writing covered calls in January is 21.26%, in February is 9.45% and in April is 7.17%.

Chart for UPS

A January covered call on UTX at strike $111.00 using 300 shares is offering an income potential of $624. In February, a strike 115.00 covered call offers $432 and in May, a strike 115.00 covered call offers $891 in premium.

The annualized return by writing covered calls in January is 21.82%, in February is 8.01% and in May is 6.66%.

Chart for UTX


Materials Focus: Income Opportunities

A January covered call on MON at strike $106.00 using 300 shares is offering an income potential of $240. In April, a strike 110.00 covered call offers $531 and in July, a strike 110.00 covered call offers $867 in premium.

The annualized return by writing covered calls in January is 8.71%, in April is 5.06% and in July is 4.80%.

Chart for MON

A January covered call on HUN at strike $20.00 using 300 shares is offering an income potential of $180. In February, a strike 20.00 covered call offers $315 and in May, a strike 20.00 covered call offers $510 in premium.

The annualized return by writing covered calls in January is 35.79%, in February is 34.21% and in May is 22.80%.

Chart for HUN


Utilities Focus: Income Opportunities

A January covered call on AEP at strike $65.00 using 300 shares is offering an income potential of $120. In February, a strike 65.00 covered call offers $240 and in May, a strike 65.00 covered call offers $480 in premium.

The annualized return by writing covered calls in January is 7.30%, in February is 7.83% and in May is 6.31%.

Chart for AEP

A February covered call on AES at strike $12.00 using 300 shares is offering an income potential of $105. In May, a strike 12.00 covered call offers $180 in premium.

The annualized return by writing covered calls in February is 18.23% and in May is 12.82%.

Chart for AES


Telecommunications Focus: Income Opportunities

A January covered call on VOD at strike $25.50 using 300 shares is offering an income potential of $126. In April, a strike 26.00 covered call offers $294 and in July, a strike 26.00 covered call offers $351 in premium.

The annualized return by writing covered calls in January is 18.80%, in April is 11.94% and in July is 8.29%.

Chart for VOD

A January covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $765. In March, a strike 105.00 covered call offers $1,350 and in June, a strike 105.00 covered call offers $2,070 in premium.

The annualized return by writing covered calls in January is 27.60%, in March is 18.41% and in June is 14.30%.

Chart for SBAC

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

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.