Income Alerts Newsletter for 12/30/2015

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 $114.50 for January 22 2016 are offering a 1.46% return, which annualizes at a rate of 22.28%.

Chart for QQQ

The DIA options at strike $177.00 for January 22 2016 are offering a 1.30% return, which annualizes at a rate of 19.76%.

Chart for DIA

The SPY options at strike $207.50 for January 22 2016 are offering a 1.40% return, which annualizes at a rate of 21.34%.

Chart for SPY


Technology Focus: Income Opportunities

A January covered call on QCOM at strike $51.00 using 300 shares is offering an income potential of $300. In February, a strike 52.50 covered call offers $480 and in March, a strike 52.50 covered call offers $546 in premium.

The annualized return by writing covered calls in January is 40.65%, in February is 22.36% and in March is 16.72%.

Chart for QCOM

A January covered call on BABA at strike $83.50 using 300 shares is offering an income potential of $609. In February, a strike 85.00 covered call offers $1,125 and in March, a strike 85.00 covered call offers $1,365 in premium.

The annualized return by writing covered calls in January is 50.68%, in February is 32.48% and in March is 26.05%.

Chart for BABA


Energy Focus: Income Opportunities

A January covered call on CVX at strike $91.50 using 300 shares is offering an income potential of $633. In February, a strike 95.00 covered call offers $627 and in March, a strike 95.00 covered call offers $822 in premium.

The annualized return by writing covered calls in January is 48.00%, in February is 16.14% and in March is 13.95%.

Chart for CVX

A January covered call on VLO at strike $71.50 using 300 shares is offering an income potential of $504. In February, a strike 72.50 covered call offers $783 and in March, a strike 72.50 covered call offers $945 in premium.

The annualized return by writing covered calls in January is 49.08%, in February is 26.25% and in March is 20.89%.

Chart for VLO


Healthcare Focus: Income Opportunities

A January covered call on GILD at strike $104.00 using 300 shares is offering an income potential of $528. In February, a strike 105.00 covered call offers $945 and in March, a strike 105.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in January is 35.13%, in February is 21.65% and in March is 18.14%.

Chart for GILD

A January covered call on HCA at strike $69.00 using 300 shares is offering an income potential of $585. In February, a strike 70.00 covered call offers $900 and in March, a strike 70.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in January is 58.98%, in February is 31.31% and in March is 25.54%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A January covered call on PM at strike $89.50 using 300 shares is offering an income potential of $309. In February, a strike 90.00 covered call offers $549 and in March, a strike 90.00 covered call offers $693 in premium.

The annualized return by writing covered calls in January is 23.65%, in February is 14.40% and in March is 11.96%.

Chart for PM

A January covered call on CVS at strike $99.50 using 300 shares is offering an income potential of $444. In February, a strike 100.00 covered call offers $747 and in May, a strike 100.00 covered call offers $1,320 in premium.

The annualized return by writing covered calls in January is 30.66%, in February is 17.70% and in May is 11.74%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A January covered call on HD at strike $134.00 using 300 shares is offering an income potential of $468. In February, a strike 135.00 covered call offers $777 and in March, a strike 135.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in January is 23.94%, in February is 13.60% and in March is 13.00%.

Chart for HD

A January covered call on AMZN at strike $695.00 using 300 shares is offering an income potential of $4,155. In February, a strike 695.00 covered call offers $11,220 and in March, a strike 695.00 covered call offers $12,975 in premium.

The annualized return by writing covered calls in January is 41.29%, in February is 39.23% and in March is 29.95%.

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 $108. In March, a strike 18.00 covered call offers $150 in premium.

The annualized return by writing covered calls in February is 14.65% and in March is 13.43%.

Chart for BAC

A January covered call on AXP at strike $71.00 using 300 shares is offering an income potential of $198. In February, a strike 72.50 covered call offers $321 and in April, a strike 72.50 covered call offers $588 in premium.

The annualized return by writing covered calls in January is 19.15%, in February is 10.61% and in April is 9.57%.

Chart for AXP


Industrials Focus: Income Opportunities

A January covered call on UNP at strike $79.00 using 300 shares is offering an income potential of $447. In February, a strike 80.00 covered call offers $708 and in May, a strike 80.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in January is 39.00%, in February is 21.22% and in May is 13.52%.

Chart for UNP

A January covered call on UTX at strike $97.50 using 300 shares is offering an income potential of $342. In February, a strike 100.00 covered call offers $336 and in May, a strike 100.00 covered call offers $774 in premium.

The annualized return by writing covered calls in January is 24.05%, in February is 8.02% and in May is 6.91%.

Chart for UTX


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 $315 in premium.

The annualized return by writing covered calls in February is 38.47% and in May is 25.86%.

Chart for HUN

A January covered call on DOW at strike $53.00 using 300 shares is offering an income potential of $315. In February, a strike 55.00 covered call offers $366 and in March, a strike 55.00 covered call offers $483 in premium.

The annualized return by writing covered calls in January is 41.15%, in February is 16.29% and in March is 14.18%.

Chart for DOW


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 February, a strike 70.00 covered call offers $285 and in April, a strike 70.00 covered call offers $435 in premium.

The annualized return by writing covered calls in January is 7.41%, in February is 9.67% and in April is 7.23%.

Chart for D

A May covered call on AES at strike $10.00 using 300 shares is offering an income potential of $135.

The annualized return by writing covered calls in May is 12.45%.

Chart for AES


Telecommunications Focus: Income Opportunities

A January covered call on VOD at strike $32.50 using 300 shares is offering an income potential of $138. In February, a strike 33.00 covered call offers $207 and in April, a strike 33.00 covered call offers $339 in premium.

The annualized return by writing covered calls in January is 29.20%, in February is 14.99% and in April is 12.10%.

Chart for VOD

A January covered call on SBAC at strike $110.00 using 300 shares is offering an income potential of $120. In February, a strike 110.00 covered call offers $495 and in March, a strike 110.00 covered call offers $930 in premium.

The annualized return by writing covered calls in January is 7.67%, in February is 10.87% and in March is 13.55%.

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.