Income Alerts Newsletter for 03/31/2016

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 $109.50 for April 22 2016 are offering a 1.44% return, which annualizes at a rate of 22.82%.

Chart for QQQ

The DIA options at strike $177.00 for April 22 2016 are offering a 1.04% return, which annualizes at a rate of 16.50%.

Chart for DIA

The SPY options at strike $206.50 for April 22 2016 are offering a 0.97% return, which annualizes at a rate of 15.32%.

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 $258. In May, a strike 52.50 covered call offers $396 and in June, a strike 52.50 covered call offers $450 in premium.

The annualized return by writing covered calls in April is 36.83%, in May is 18.65% and in June is 13.83%.

Chart for QCOM

An April covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $501. In May, a strike 80.00 covered call offers $975 and in July, a strike 80.00 covered call offers $1,320 in premium.

The annualized return by writing covered calls in April is 46.45%, in May is 30.17% and in July is 19.97%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on OXY at strike $70.00 using 300 shares is offering an income potential of $228. In May, a strike 70.00 covered call offers $579 and in August, a strike 70.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in April is 24.05%, in May is 20.32% and in August is 13.31%.

Chart for OXY

An April covered call on APC at strike $47.00 using 300 shares is offering an income potential of $468. In May, a strike 47.50 covered call offers $960 and in August, a strike 47.50 covered call offers $1,560 in premium.

The annualized return by writing covered calls in April is 74.71%, in May is 52.01% and in August is 32.22%.

Chart for APC


Healthcare Focus: Income Opportunities

An April covered call on ESRX at strike $70.00 using 300 shares is offering an income potential of $279. In May, a strike 70.00 covered call offers $717 and in June, a strike 70.00 covered call offers $840 in premium.

The annualized return by writing covered calls in April is 29.31%, in May is 25.17% and in June is 19.28%.

Chart for ESRX

An April covered call on GILD at strike $92.00 using 300 shares is offering an income potential of $483. In May, a strike 92.50 covered call offers $990 and in June, a strike 92.50 covered call offers $1,200 in premium.

The annualized return by writing covered calls in April is 38.26%, in May is 26.12% and in June is 20.75%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

An April covered call on KO at strike $47.00 using 300 shares is offering an income potential of $84. In May, a strike 47.00 covered call offers $240 and in June, a strike 47.00 covered call offers $273 in premium.

The annualized return by writing covered calls in April is 12.98%, in May is 12.27% and in June is 9.09%.

Chart for KO

An April covered call on PEP at strike $103.00 using 300 shares is offering an income potential of $216. In May, a strike 105.00 covered call offers $282 and in July, a strike 105.00 covered call offers $465 in premium.

The annualized return by writing covered calls in April is 15.16%, in May is 6.48% and in July is 5.18%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

An April covered call on GM at strike $31.00 using 300 shares is offering an income potential of $192. In May, a strike 31.00 covered call offers $351 and in June, a strike 31.00 covered call offers $432 in premium.

The annualized return by writing covered calls in April is 45.28%, in May is 27.54% and in June is 22.23%.

Chart for GM

An April covered call on AMZN at strike $600.00 using 300 shares is offering an income potential of $3,645. In May, a strike 600.00 covered call offers $9,405 and in July, a strike 600.00 covered call offers $11,910 in premium.

The annualized return by writing covered calls in April is 44.48%, in May is 38.79% and in July is 24.00%.

Chart for AMZN


Financials Focus: Income Opportunities

An April covered call on BAC at strike $13.50 using 300 shares is offering an income potential of $105. In May, a strike 14.00 covered call offers $108 and in June, a strike 14.00 covered call offers $135 in premium.

The annualized return by writing covered calls in April is 57.23%, in May is 19.26% and in June is 15.76%.

Chart for BAC

An April covered call on MET at strike $45.00 using 300 shares is offering an income potential of $219. In May, a strike 45.00 covered call offers $447 and in June, a strike 45.00 covered call offers $510 in premium.

The annualized return by writing covered calls in April is 35.62%, in May is 24.19% and in June is 18.03%.

Chart for MET


Industrials Focus: Income Opportunities

An April covered call on UNP at strike $82.50 using 300 shares is offering an income potential of $189. In May, a strike 82.50 covered call offers $618 and in August, a strike 82.50 covered call offers $1,050 in premium.

The annualized return by writing covered calls in April is 16.92%, in May is 18.42% and in August is 11.59%.

Chart for UNP

An April covered call on UTX at strike $101.00 using 300 shares is offering an income potential of $285. In May, a strike 105.00 covered call offers $216 and in August, a strike 105.00 covered call offers $567 in premium.

The annualized return by writing covered calls in April is 20.54%, in May is 5.08% and in August is 4.90%.

Chart for UTX


Materials Focus: Income Opportunities

An April covered call on LYB at strike $87.50 using 300 shares is offering an income potential of $345. In May, a strike 87.50 covered call offers $855 and in June, a strike 87.50 covered call offers $1,050 in premium.

The annualized return by writing covered calls in April is 29.13%, in May is 24.09% and in June is 19.38%.

Chart for LYB

An April covered call on NEM at strike $27.00 using 300 shares is offering an income potential of $255. In May, a strike 27.00 covered call offers $501 and in June, a strike 27.00 covered call offers $624 in premium.

The annualized return by writing covered calls in April is 70.46%, in May is 46.74% and in June is 38.47%.

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 $240 and in August, a strike 67.50 covered call offers $480 in premium.

The annualized return by writing covered calls in April is 8.16%, in May is 8.61% and in August is 6.34%.

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 $180 in premium.

The annualized return by writing covered calls in May is 15.43% and in August is 13.90%.

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 $150. In May, a strike 32.00 covered call offers $390 and in July, a strike 32.00 covered call offers $480 in premium.

The annualized return by writing covered calls in April is 34.22%, in May is 29.85% and in July is 17.86%.

Chart for CTL

An April covered call on VZ at strike $54.50 using 300 shares is offering an income potential of $93. In May, a strike 55.00 covered call offers $153 and in June, a strike 55.00 covered call offers $228 in premium.

The annualized return by writing covered calls in April is 12.39%, in May is 6.69% and in June is 6.51%.

Chart for VZ

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

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