Income Alerts Newsletter for 12/24/2015

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 $113.00 for January 16 2016 are offering a 1.26% return, which annualizes at a rate of 19.15%.

Chart for QQQ

The DIA options at strike $176.00 for January 16 2016 are offering a 1.26% return, which annualizes at a rate of 19.10%.

Chart for DIA

The SPY options at strike $206.50 for January 22 2016 are offering a 1.34% return, which annualizes at a rate of 16.28%.

Chart for SPY


Technology Focus: Income Opportunities

A January covered call on BABA at strike $85.00 using 300 shares is offering an income potential of $729. In February, a strike 85.00 covered call offers $1,455 and in March, a strike 85.00 covered call offers $1,695 in premium.

The annualized return by writing covered calls in January is 46.82%, in February is 38.18% and in March is 30.30%.

Chart for BABA

A January covered call on GOOG at strike $755.00 using 300 shares is offering an income potential of $3,330. In February, a strike 755.00 covered call offers $9,090 and in March, a strike 755.00 covered call offers $10,440 in premium.

The annualized return by writing covered calls in January is 23.83%, in February is 26.48% and in March is 20.64%.

Chart for GOOG


Energy Focus: Income Opportunities

A January covered call on CVX at strike $95.00 using 300 shares is offering an income potential of $588. In February, a strike 95.00 covered call offers $1,020 and in March, a strike 95.00 covered call offers $1,215 in premium.

The annualized return by writing covered calls in January is 32.45%, in February is 23.27% and in March is 18.93%.

Chart for CVX

A January covered call on VLO at strike $72.50 using 300 shares is offering an income potential of $552. In March, a strike 72.50 covered call offers $1,125 and in June, a strike 72.50 covered call offers $1,590 in premium.

The annualized return by writing covered calls in January is 39.98%, in March is 23.11% and in June is 16.34%.

Chart for VLO


Healthcare Focus: Income Opportunities

A January covered call on HCA at strike $70.00 using 300 shares is offering an income potential of $570. In March, a strike 70.00 covered call offers $1,170 and in June, a strike 70.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in January is 42.72%, in March is 24.93% and in June is 17.96%.

Chart for HCA

A January covered call on PFE at strike $33.00 using 300 shares is offering an income potential of $93. In February, a strike 33.00 covered call offers $189 and in March, a strike 33.00 covered call offers $240 in premium.

The annualized return by writing covered calls in January is 14.62%, in February is 12.21% and in March is 10.57%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A January covered call on PM at strike $90.00 using 300 shares is offering an income potential of $243. In March, a strike 90.00 covered call offers $675 and in June, a strike 90.00 covered call offers $870 in premium.

The annualized return by writing covered calls in January is 13.96%, in March is 10.87% and in June is 6.90%.

Chart for PM

A January covered call on CVS at strike $100.00 using 300 shares is offering an income potential of $327. In February, a strike 100.00 covered call offers $684 and in May, a strike 100.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in January is 17.76%, in February is 14.91% and in May is 10.91%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A January covered call on GM at strike $35.00 using 300 shares is offering an income potential of $198. In March, a strike 35.00 covered call offers $432 and in June, a strike 35.00 covered call offers $609 in premium.

The annualized return by writing covered calls in January is 29.42%, in March is 18.12% and in June is 12.71%.

Chart for GM

A January covered call on HD at strike $135.00 using 300 shares is offering an income potential of $318. In February, a strike 135.00 covered call offers $771 and in May, a strike 135.00 covered call offers $1,665 in premium.

The annualized return by writing covered calls in January is 12.21%, in February is 12.18% and in May is 10.59%.

Chart for HD


Financials Focus: Income Opportunities

A February covered call on BAC at strike $18.00 using 300 shares is offering an income potential of $126. In March, a strike 18.00 covered call offers $168 in premium.

The annualized return by writing covered calls in February is 15.36% and in March is 14.00%.

Chart for BAC

A February covered call on WFC at strike $57.50 using 300 shares is offering an income potential of $141. In April, a strike 57.50 covered call offers $318 in premium.

The annualized return by writing covered calls in February is 5.42% and in April is 6.29%.

Chart for WFC


Industrials Focus: Income Opportunities

A January covered call on UTX at strike $97.50 using 300 shares is offering an income potential of $255. In February, a strike 100.00 covered call offers $249 and in May, a strike 100.00 covered call offers $675 in premium.

The annualized return by writing covered calls in January is 13.54%, in February is 5.38% and in May is 5.82%.

Chart for UTX

A January covered call on GE at strike $31.00 using 300 shares is offering an income potential of $135. In February, a strike 31.00 covered call offers $228 and in March, a strike 31.00 covered call offers $270 in premium.

The annualized return by writing covered calls in January is 22.44%, in February is 15.57% and in March is 12.57%.

Chart for GE


Materials Focus: Income Opportunities

A January covered call on CF at strike $45.00 using 300 shares is offering an income potential of $381. In February, a strike 45.00 covered call offers $702 and in May, a strike 45.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in January is 45.02%, in February is 34.61% and in May is 22.58%.

Chart for CF

A January covered call on FCX at strike $8.00 using 300 shares is offering an income potential of $108. In February, a strike 8.00 covered call offers $216 and in May, a strike 8.00 covered call offers $255 in premium.

The annualized return by writing covered calls in January is 80.58%, in February is 67.33% and in May is 31.55%.

Chart for FCX


Utilities Focus: Income Opportunities

A January covered call on D at strike $70.00 using 300 shares is offering an income potential of $75. In April, a strike 70.00 covered call offers $390 and in July, a strike 70.00 covered call offers $555 in premium.

The annualized return by writing covered calls in January is 5.61%, in April is 6.18% and in July is 4.95%.

Chart for D

A May covered call on AES at strike $10.00 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in May is 10.65%.

Chart for AES


Telecommunications Focus: Income Opportunities

A February covered call on T at strike $35.00 using 300 shares is offering an income potential of $141. In March, a strike 35.00 covered call offers $192 in premium.

The annualized return by writing covered calls in February is 8.47% and in March is 7.86%.

Chart for T

A January covered call on TMUS at strike $41.00 using 300 shares is offering an income potential of $201. In February, a strike 41.00 covered call offers $411 and in May, a strike 41.00 covered call offers $783 in premium.

The annualized return by writing covered calls in January is 25.82%, in February is 21.87% and in May is 16.93%.

Chart for TMUS

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

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