Income Alerts Newsletter for 12/29/2015

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 22 2016 are offering a 1.48% return, which annualizes at a rate of 21.59%.

Chart for QQQ

The DIA options at strike $175.00 for January 22 2016 are offering a 1.45% return, which annualizes at a rate of 21.16%.

Chart for DIA

The SPY options at strike $205.50 for January 22 2016 are offering a 1.45% return, which annualizes at a rate of 21.15%.

Chart for SPY


Technology Focus: Income Opportunities

A January covered call on QCOM at strike $50.00 using 300 shares is offering an income potential of $261. In February, a strike 50.00 covered call offers $645 and in March, a strike 50.00 covered call offers $711 in premium.

The annualized return by writing covered calls in January is 34.31%, in February is 30.65% and in March is 22.35%.

Chart for QCOM

A January covered call on BABA at strike $82.50 using 300 shares is offering an income potential of $642. In February, a strike 82.50 covered call offers $1,365 and in March, a strike 82.50 covered call offers $1,590 in premium.

The annualized return by writing covered calls in January is 51.39%, in February is 39.64% and in March is 30.70%.

Chart for BABA


Energy Focus: Income Opportunities

A January covered call on CVX at strike $90.50 using 300 shares is offering an income potential of $690. In February, a strike 95.00 covered call offers $555 and in March, a strike 95.00 covered call offers $741 in premium.

The annualized return by writing covered calls in January is 50.18%, in February is 14.13% and in March is 12.51%.

Chart for CVX

A January covered call on VLO at strike $71.00 using 300 shares is offering an income potential of $549. In February, a strike 72.50 covered call offers $747 and in March, a strike 72.50 covered call offers $945 in premium.

The annualized return by writing covered calls in January is 51.11%, in February is 24.70% and in March is 20.78%.

Chart for VLO


Healthcare Focus: Income Opportunities

A January covered call on HCA at strike $68.50 using 300 shares is offering an income potential of $555. In February, a strike 70.00 covered call offers $780 and in March, a strike 70.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in January is 53.69%, in February is 26.86% and in March is 23.41%.

Chart for HCA

A January covered call on MCK at strike $210.00 using 300 shares is offering an income potential of $120. In February, a strike 210.00 covered call offers $780 and in May, a strike 210.00 covered call offers $1,920 in premium.

The annualized return by writing covered calls in January is 3.84%, in February is 8.89% and in May is 8.31%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A January covered call on PM at strike $89.00 using 300 shares is offering an income potential of $291. In February, a strike 90.00 covered call offers $462 and in March, a strike 90.00 covered call offers $600 in premium.

The annualized return by writing covered calls in January is 21.27%, in February is 11.96% and in March is 10.28%.

Chart for PM

A January covered call on CVS at strike $98.50 using 300 shares is offering an income potential of $504. In February, a strike 100.00 covered call offers $666 and in May, a strike 100.00 covered call offers $1,230 in premium.

The annualized return by writing covered calls in January is 33.36%, in February is 15.60% and in May is 10.94%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A January covered call on HD at strike $133.00 using 300 shares is offering an income potential of $495. In February, a strike 135.00 covered call offers $675 and in March, a strike 135.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in January is 24.19%, in February is 11.66% and in March is 11.53%.

Chart for HD

A January covered call on AMZN at strike $677.50 using 300 shares is offering an income potential of $3,975. In February, a strike 680.00 covered call offers $10,650 and in March, a strike 680.00 covered call offers $12,300 in premium.

The annualized return by writing covered calls in January is 38.45%, in February is 37.51% and in March is 28.78%.

Chart for AMZN


Financials Focus: Income Opportunities

A February covered call on BAC at strike $18.00 using 300 shares is offering an income potential of $105. In March, a strike 18.00 covered call offers $147 in premium.

The annualized return by writing covered calls in February is 14.10% and in March is 13.11%.

Chart for BAC

A January covered call on WFC at strike $55.00 using 300 shares is offering an income potential of $225. In February, a strike 55.00 covered call offers $366 and in March, a strike 55.00 covered call offers $471 in premium.

The annualized return by writing covered calls in January is 26.72%, in February is 15.43% and in March is 13.16%.

Chart for WFC


Industrials Focus: Income Opportunities

A January covered call on UTX at strike $96.50 using 300 shares is offering an income potential of $330. In February, a strike 100.00 covered call offers $252 and in May, a strike 100.00 covered call offers $669 in premium.

The annualized return by writing covered calls in January is 22.25%, in February is 5.96% and in May is 5.98%.

Chart for UTX

A January covered call on GE at strike $31.00 using 300 shares is offering an income potential of $111. In February, a strike 31.00 covered call offers $219 and in March, a strike 31.00 covered call offers $261 in premium.

The annualized return by writing covered calls in January is 23.28%, in February is 16.35% and in March is 12.90%.

Chart for GE


Materials Focus: Income Opportunities

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

The annualized return by writing covered calls in February is 38.15% and in May is 24.61%.

Chart for HUN

A January covered call on DOW at strike $52.50 using 300 shares is offering an income potential of $258. In February, a strike 52.50 covered call offers $552 and in March, a strike 52.50 covered call offers $672 in premium.

The annualized return by writing covered calls in January is 32.16%, in February is 24.68% and in March is 19.95%.

Chart for DOW


Utilities Focus: Income Opportunities

A February covered call on D at strike $70.00 using 300 shares is offering an income potential of $210. In April, a strike 70.00 covered call offers $360 in premium.

The annualized return by writing covered calls in February is 7.05% and in April is 5.97%.

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 11.11%.

Chart for AES


Telecommunications Focus: Income Opportunities

A January covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $585. In February, a strike 105.00 covered call offers $1,050 and in March, a strike 105.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in January is 36.38%, in February is 23.32% and in March is 21.34%.

Chart for SBAC

A February covered call on T at strike $35.00 using 300 shares is offering an income potential of $135. In March, a strike 35.00 covered call offers $180 in premium.

The annualized return by writing covered calls in February is 8.87% and in March is 7.82%.

Chart for T

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

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