Income Alerts Newsletter for 03/30/2016

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 $109.00 for April 22 2016 are offering a 1.37% return, which annualizes at a rate of 20.82%.

Chart for QQQ

The DIA options at strike $176.50 for April 22 2016 are offering a 1.05% return, which annualizes at a rate of 15.97%.

Chart for DIA

The SPY options at strike $205.50 for April 22 2016 are offering a 1.10% return, which annualizes at a rate of 16.72%.

Chart for SPY


Technology Focus: Income Opportunities

An April covered call on QCOM at strike $51.00 using 300 shares is offering an income potential of $246. In May, a strike 52.50 covered call offers $405 and in June, a strike 52.50 covered call offers $462 in premium.

The annualized return by writing covered calls in April is 33.30%, in May is 18.82% and in June is 14.10%.

Chart for QCOM

An April covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $357. In May, a strike 80.00 covered call offers $900 and in July, a strike 80.00 covered call offers $1,245 in premium.

The annualized return by writing covered calls in April is 31.38%, in May is 27.52% and in July is 18.80%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on APC at strike $47.00 using 300 shares is offering an income potential of $528. In May, a strike 47.50 covered call offers $915 and in August, a strike 47.50 covered call offers $1,560 in premium.

The annualized return by writing covered calls in April is 80.25%, in May is 48.64% and in August is 32.12%.

Chart for APC

An April covered call on EOG at strike $75.50 using 300 shares is offering an income potential of $645. In May, a strike 77.50 covered call offers $900 and in July, a strike 77.50 covered call offers $1,140 in premium.

The annualized return by writing covered calls in April is 59.48%, in May is 28.52% and in July is 17.76%.

Chart for EOG


Healthcare Focus: Income Opportunities

An April covered call on GILD at strike $92.50 using 300 shares is offering an income potential of $519. In May, a strike 92.50 covered call offers $1,080 and in June, a strike 92.50 covered call offers $1,290 in premium.

The annualized return by writing covered calls in April is 38.78%, in May is 27.98% and in June is 22.04%.

Chart for GILD

An April covered call on HCA at strike $78.00 using 300 shares is offering an income potential of $450. In May, a strike 82.50 covered call offers $375 and in June, a strike 80.00 covered call offers $810 in premium.

The annualized return by writing covered calls in April is 39.99%, in May is 11.28% and in June is 16.25%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

An April covered call on KO at strike $46.50 using 300 shares is offering an income potential of $138. In May, a strike 47.00 covered call offers $210 and in June, a strike 47.00 covered call offers $261 in premium.

The annualized return by writing covered calls in April is 20.27%, in May is 10.53% and in June is 8.60%.

Chart for KO

An April covered call on PEP at strike $102.00 using 300 shares is offering an income potential of $222. In May, a strike 105.00 covered call offers $225 and in July, a strike 105.00 covered call offers $354 in premium.

The annualized return by writing covered calls in April is 14.91%, in May is 5.13% and in July is 3.94%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

An April covered call on GM at strike $31.50 using 300 shares is offering an income potential of $138. In May, a strike 32.00 covered call offers $246 and in June, a strike 32.00 covered call offers $276 in premium.

The annualized return by writing covered calls in April is 30.35%, in May is 18.59% and in June is 13.70%.

Chart for GM

An April covered call on AMZN at strike $595.00 using 300 shares is offering an income potential of $3,735. In May, a strike 595.00 covered call offers $9,705 and in July, a strike 595.00 covered call offers $12,555 in premium.

The annualized return by writing covered calls in April is 43.42%, in May is 39.68% and in July is 25.39%.

Chart for AMZN


Financials Focus: Income Opportunities

An April covered call on GS at strike $157.50 using 300 shares is offering an income potential of $624. In May, a strike 160.00 covered call offers $1,110 and in July, a strike 160.00 covered call offers $1,725 in premium.

The annualized return by writing covered calls in April is 27.58%, in May is 16.84% and in July is 12.90%.

Chart for GS

An April covered call on AXP at strike $61.00 using 300 shares is offering an income potential of $201. In May, a strike 62.50 covered call offers $348 and in July, a strike 62.50 covered call offers $525 in premium.

The annualized return by writing covered calls in April is 22.67%, in May is 13.44% and in July is 9.96%.

Chart for AXP


Industrials Focus: Income Opportunities

An April covered call on UNP at strike $80.00 using 300 shares is offering an income potential of $435. In May, a strike 80.00 covered call offers $894 and in August, a strike 80.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in April is 37.53%, in May is 26.72% and in August is 15.15%.

Chart for UNP

An April covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $75. In May, a strike 11.00 covered call offers $210 and in June, a strike 11.00 covered call offers $270 in premium.

The annualized return by writing covered calls in April is 50.39%, in May is 50.16% and in June is 43.10%.

Chart for HTZ


Materials Focus: Income Opportunities

An April covered call on LYB at strike $87.50 using 300 shares is offering an income potential of $285. In May, a strike 87.50 covered call offers $810 and in June, a strike 87.50 covered call offers $1,050 in premium.

The annualized return by writing covered calls in April is 22.87%, in May is 22.54% and in June is 19.31%.

Chart for LYB

An April covered call on NEM at strike $27.00 using 300 shares is offering an income potential of $297. In May, a strike 27.00 covered call offers $540 and in June, a strike 27.00 covered call offers $660 in premium.

The annualized return by writing covered calls in April is 77.33%, in May is 49.29% and in June is 40.05%.

Chart for NEM


Utilities Focus: Income Opportunities

An April covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $75. In May, a strike 67.50 covered call offers $150 and in August, a strike 67.50 covered call offers $495 in premium.

The annualized return by writing covered calls in April is 7.71%, in May is 5.25% and in August is 6.50%.

Chart for AEP

A May covered call on AES at strike $12.00 using 300 shares is offering an income potential of $75. In August, a strike 12.00 covered call offers $165 in premium.

The annualized return by writing covered calls in May is 15.10% and in August is 12.56%.

Chart for AES


Telecommunications Focus: Income Opportunities

An April covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $135. In May, a strike 32.00 covered call offers $360 and in July, a strike 32.00 covered call offers $450 in premium.

The annualized return by writing covered calls in April is 29.30%, in May is 27.19% and in July is 16.69%.

Chart for CTL

An April covered call on VZ at strike $54.50 using 300 shares is offering an income potential of $81. In May, a strike 55.00 covered call offers $159 and in June, a strike 55.00 covered call offers $234 in premium.

The annualized return by writing covered calls in April is 10.18%, in May is 6.82% and in June is 6.60%.

Chart for VZ

* 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.