Income Alerts Newsletter for 04/01/2016

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 1.26% return, which annualizes at a rate of 20.92%.

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 17.18%.

Chart for DIA

The SPY options at strike $206.00 for April 22 2016 are offering a 1.20% return, which annualizes at a rate of 19.85%.

Chart for SPY


Technology Focus: Income Opportunities

An April covered call on QCOM at strike $51.50 using 300 shares is offering an income potential of $192. In May, a strike 52.50 covered call offers $414 and in June, a strike 52.50 covered call offers $477 in premium.

The annualized return by writing covered calls in April is 28.91%, in May is 19.85% and in June is 14.83%.

Chart for QCOM

An April covered call on BABA at strike $80.00 using 300 shares is offering an income potential of $357. In May, a strike 80.00 covered call offers $990 and in July, a strike 80.00 covered call offers $1,335 in premium.

The annualized return by writing covered calls in April is 34.88%, in May is 31.19% and in July is 20.35%.

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 $480. In May, a strike 47.50 covered call offers $915 and in August, a strike 47.50 covered call offers $1,545 in premium.

The annualized return by writing covered calls in April is 81.17%, in May is 50.16% and in August is 31.96%.

Chart for APC

An April covered call on EOG at strike $75.00 using 300 shares is offering an income potential of $285. In May, a strike 75.00 covered call offers $840 and in July, a strike 75.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in April is 30.26%, in May is 28.72% and in July is 21.48%.

Chart for EOG


Healthcare Focus: Income Opportunities

An April covered call on GILD at strike $92.00 using 300 shares is offering an income potential of $450. In May, a strike 92.50 covered call offers $960 and in June, a strike 92.50 covered call offers $1,170 in premium.

The annualized return by writing covered calls in April is 37.87%, in May is 25.83% and in June is 20.49%.

Chart for GILD

An April covered call on HCA at strike $79.00 using 300 shares is offering an income potential of $390. In May, a strike 82.50 covered call offers $420 and in June, a strike 80.00 covered call offers $885 in premium.

The annualized return by writing covered calls in April is 38.64%, in May is 13.07% and in June is 18.15%.

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 $120. In May, a strike 47.00 covered call offers $192 and in June, a strike 47.00 covered call offers $249 in premium.

The annualized return by writing covered calls in April is 19.84%, in May is 10.01% and in June is 8.42%.

Chart for KO

An April covered call on PEP at strike $103.00 using 300 shares is offering an income potential of $210. In May, a strike 105.00 covered call offers $288 and in July, a strike 105.00 covered call offers $477 in premium.

The annualized return by writing covered calls in April is 15.69%, in May is 6.77% and in July is 5.38%.

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 $156. In May, a strike 32.00 covered call offers $258 and in June, a strike 32.00 covered call offers $303 in premium.

The annualized return by writing covered calls in April is 38.38%, in May is 20.13% and in June is 15.34%.

Chart for GM

An April covered call on AMZN at strike $595.00 using 300 shares is offering an income potential of $3,300. In May, a strike 595.00 covered call offers $9,360 and in July, a strike 595.00 covered call offers $11,850 in premium.

The annualized return by writing covered calls in April is 43.07%, in May is 39.70% and in July is 24.32%.

Chart for AMZN


Financials Focus: Income Opportunities

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

The annualized return by writing covered calls in May is 19.02% and in June is 15.91%.

Chart for BAC

An April covered call on MET at strike $44.50 using 300 shares is offering an income potential of $201. In May, a strike 45.00 covered call offers $339 and in June, a strike 45.00 covered call offers $432 in premium.

The annualized return by writing covered calls in April is 35.32%, in May is 18.89% and in June is 15.65%.

Chart for MET


Industrials Focus: Income Opportunities

An April covered call on UNP at strike $80.00 using 300 shares is offering an income potential of $366. In May, a strike 80.00 covered call offers $849 and in August, a strike 80.00 covered call offers $1,275 in premium.

The annualized return by writing covered calls in April is 35.53%, in May is 26.40% and in August is 14.51%.

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 $225 and in June, a strike 11.00 covered call offers $270 in premium.

The annualized return by writing covered calls in April is 55.48%, in May is 54.88% and in June is 43.18%.

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 $1,080 in premium.

The annualized return by writing covered calls in April is 25.61%, in May is 23.32% and in June is 20.29%.

Chart for LYB

An April covered call on NEM at strike $27.00 using 300 shares is offering an income potential of $213. In May, a strike 27.00 covered call offers $483 and in June, a strike 27.00 covered call offers $594 in premium.

The annualized return by writing covered calls in April is 62.61%, in May is 46.15% and in June is 37.19%.

Chart for NEM


Utilities Focus: Income Opportunities

A May covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $210. In August, a strike 67.50 covered call offers $480 in premium.

The annualized return by writing covered calls in May is 7.65% and in August is 6.37%.

Chart for AEP

A May covered call on AES at strike $12.00 using 300 shares is offering an income potential of $90. In August, a strike 12.00 covered call offers $180 in premium.

The annualized return by writing covered calls in May is 18.67% and in August is 13.77%.

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 36.26%, in May is 30.35% and in July is 17.98%.

Chart for CTL

A May covered call on VZ at strike $55.00 using 300 shares is offering an income potential of $153. In June, a strike 55.00 covered call offers $222 in premium.

The annualized return by writing covered calls in May is 6.81% and in June is 6.41%.

Chart for VZ

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

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