Income Alerts Newsletter for 12/28/2016

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 $121.00 for January 21 2017 are offering a 1.19% return, which annualizes at a rate of 17.36%.

Chart for QQQ

The DIA options at strike $199.50 for January 21 2017 are offering a 0.00% return, which annualizes at a rate of 0.00%.

Chart for DIA

The SPY options at strike $226.50 for January 21 2017 are offering a 0.94% return, which annualizes at a rate of 13.68%.

Chart for SPY


Technology Focus: Income Opportunities

A February covered call on QCOM at strike $75.00 using 300 shares is offering an income potential of $105.

The annualized return by writing covered calls in February is 3.67%.

Chart for QCOM

A January covered call on GOOG at strike $802.50 using 300 shares is offering an income potential of $2,010. In February, a strike 805.00 covered call offers $6,120 and in March, a strike 795.00 covered call offers $8,850 in premium.

The annualized return by writing covered calls in January is 12.98%, in February is 18.57% and in March is 17.66%.

Chart for GOOG


Energy Focus: Income Opportunities

A January covered call on APC at strike $72.00 using 300 shares is offering an income potential of $534. In February, a strike 72.50 covered call offers $900 and in May, a strike 72.50 covered call offers $1,665 in premium.

The annualized return by writing covered calls in January is 37.25%, in February is 30.14% and in May is 21.32%.

Chart for APC

A January covered call on EOG at strike $104.00 using 300 shares is offering an income potential of $507. In February, a strike 115.00 covered call offers $144 and in April, a strike 125.00 covered call offers $240 in premium.

The annualized return by writing covered calls in January is 25.49%, in February is 3.30% and in April is 2.50%.

Chart for EOG


Healthcare Focus: Income Opportunities

A January covered call on PFE at strike $33.00 using 300 shares is offering an income potential of $102. In February, a strike 33.00 covered call offers $192 and in March, a strike 33.00 covered call offers $240 in premium.

The annualized return by writing covered calls in January is 15.42%, in February is 13.82% and in March is 11.36%.

Chart for PFE

A January covered call on HCA at strike $74.50 using 300 shares is offering an income potential of $600. In February, a strike 75.00 covered call offers $870 and in March, a strike 75.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in January is 40.35%, in February is 27.94% and in March is 22.92%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A January covered call on ADM at strike $46.00 using 300 shares is offering an income potential of $216. In February, a strike 46.00 covered call offers $369 and in March, a strike 46.00 covered call offers $513 in premium.

The annualized return by writing covered calls in January is 23.40%, in February is 19.07% and in March is 17.54%.

Chart for ADM

A January covered call on KO at strike $42.00 using 300 shares is offering an income potential of $108. In February, a strike 42.00 covered call offers $234 and in March, a strike 42.00 covered call offers $285 in premium.

The annualized return by writing covered calls in January is 12.74%, in February is 13.16% and in March is 10.53%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

A January covered call on CMCSA at strike $71.00 using 300 shares is offering an income potential of $390. In February, a strike 75.00 covered call offers $201 in premium.

The annualized return by writing covered calls in January is 22.34% and in February is 6.70%.

Chart for CMCSA

A January covered call on FOXA at strike $29.50 using 300 shares is offering an income potential of $75. In February, a strike 29.00 covered call offers $255 and in April, a strike 32.00 covered call offers $75 in premium.

The annualized return by writing covered calls in January is 13.44%, in February is 21.55% and in April is 2.80%.

Chart for FOXA


Financials Focus: Income Opportunities

A February covered call on GS at strike $285.00 using 300 shares is offering an income potential of $156.

The annualized return by writing covered calls in February is 1.51%.

Chart for GS

A January covered call on JPM at strike $91.50 using 300 shares is offering an income potential of $114.

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

Chart for JPM


Industrials Focus: Income Opportunities

A January covered call on UNP at strike $106.00 using 300 shares is offering an income potential of $774. In February, a strike 110.00 covered call offers $558 and in May, a strike 110.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in January is 36.52%, in February is 12.33% and in May is 9.58%.

Chart for UNP

A January covered call on UPS at strike $117.00 using 300 shares is offering an income potential of $399. In February, a strike 120.00 covered call offers $384 and in April, a strike 120.00 covered call offers $699 in premium.

The annualized return by writing covered calls in January is 16.91%, in February is 7.68% and in April is 6.44%.

Chart for UPS


Materials Focus: Income Opportunities

A January covered call on NEM at strike $33.00 using 300 shares is offering an income potential of $348. In February, a strike 33.00 covered call offers $585 and in March, a strike 33.00 covered call offers $732 in premium.

The annualized return by writing covered calls in January is 53.88%, in February is 43.83% and in March is 36.47%.

Chart for NEM

A January covered call on MON at strike $106.00 using 300 shares is offering an income potential of $147. In February, a strike 110.00 covered call offers $240 and in April, a strike 110.00 covered call offers $534 in premium.

The annualized return by writing covered calls in January is 6.80%, in February is 5.25% and in April is 5.39%.

Chart for MON


Utilities Focus: Income Opportunities

A January covered call on ED at strike $75.00 using 300 shares is offering an income potential of $210. In February, a strike 75.00 covered call offers $390 and in May, a strike 75.00 covered call offers $765 in premium.

The annualized return by writing covered calls in January is 13.99%, in February is 12.36% and in May is 9.08%.

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 1.54%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A January covered call on VZ at strike $54.00 using 300 shares is offering an income potential of $144. In February, a strike 55.00 covered call offers $180 and in March, a strike 55.00 covered call offers $255 in premium.

The annualized return by writing covered calls in January is 13.18%, in February is 7.79% and in March is 7.26%.

Chart for VZ

A January covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $105. In February, a strike 110.00 covered call offers $450 and in March, a strike 110.00 covered call offers $750 in premium.

The annualized return by writing covered calls in January is 5.07%, in February is 10.14% and in March is 11.09%.

Chart for SBAC

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

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