Income Alerts Newsletter for 04/05/2016

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 $110.00 for April 29 2016 are offering a 1.55% return, which annualizes at a rate of 22.56%.

Chart for QQQ

The DIA options at strike $177.50 for April 29 2016 are offering a 1.20% return, which annualizes at a rate of 17.52%.

Chart for DIA

The SPY options at strike $206.00 for April 29 2016 are offering a 1.28% return, which annualizes at a rate of 18.67%.

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 $168. In May, a strike 52.50 covered call offers $411 and in June, a strike 52.50 covered call offers $447 in premium.

The annualized return by writing covered calls in April is 34.01%, in May is 21.59% and in June is 14.75%.

Chart for QCOM

An April covered call on BABA at strike $80.00 using 300 shares is offering an income potential of $348. In May, a strike 80.00 covered call offers $960 and in July, a strike 80.00 covered call offers $1,365 in premium.

The annualized return by writing covered calls in April is 45.26%, in May is 32.73% and in July is 21.62%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on APC at strike $45.00 using 300 shares is offering an income potential of $414. In May, a strike 45.00 covered call offers $915 and in August, a strike 45.00 covered call offers $1,560 in premium.

The annualized return by writing covered calls in April is 97.20%, in May is 57.05% and in August is 34.94%.

Chart for APC

An April covered call on HES at strike $52.50 using 300 shares is offering an income potential of $192. In May, a strike 52.50 covered call offers $666 and in June, a strike 52.50 covered call offers $1,080 in premium.

The annualized return by writing covered calls in April is 39.00%, in May is 35.67% and in June is 37.32%.

Chart for HES


Healthcare Focus: Income Opportunities

An April covered call on GILD at strike $94.50 using 300 shares is offering an income potential of $435. In May, a strike 95.00 covered call offers $885 and in June, a strike 95.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in April is 47.65%, in May is 25.16% and in June is 19.94%.

Chart for GILD

An April covered call on HCA at strike $79.00 using 300 shares is offering an income potential of $360. In May, a strike 82.50 covered call offers $525 and in June, a strike 80.00 covered call offers $900 in premium.

The annualized return by writing covered calls in April is 47.24%, in May is 17.72% and in June is 19.35%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A May covered call on KO at strike $47.00 using 300 shares is offering an income potential of $213. In June, a strike 47.00 covered call offers $267 in premium.

The annualized return by writing covered calls in May is 11.32% and in June is 9.12%.

Chart for KO

An April covered call on PEP at strike $104.00 using 300 shares is offering an income potential of $153. In May, a strike 105.00 covered call offers $360 and in July, a strike 105.00 covered call offers $549 in premium.

The annualized return by writing covered calls in April is 15.08%, in May is 9.12% and in July is 6.38%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

An April covered call on AMZN at strike $595.00 using 300 shares is offering an income potential of $2,670. In May, a strike 595.00 covered call offers $9,735 and in July, a strike 595.00 covered call offers $11,790 in premium.

The annualized return by writing covered calls in April is 46.33%, in May is 44.94% and in July is 25.14%.

Chart for AMZN

An April covered call on CBS at strike $55.00 using 300 shares is offering an income potential of $306. In May, a strike 55.00 covered call offers $630 and in June, a strike 55.00 covered call offers $738 in premium.

The annualized return by writing covered calls in April is 55.75%, in May is 30.37% and in June is 22.50%.

Chart for CBS


Financials Focus: Income Opportunities

A May covered call on BAC at strike $14.00 using 300 shares is offering an income potential of $108. In June, a strike 14.00 covered call offers $141 in premium.

The annualized return by writing covered calls in May is 21.26% and in June is 17.54%.

Chart for BAC

An April covered call on MET at strike $44.50 using 300 shares is offering an income potential of $135. In May, a strike 45.00 covered call offers $306 and in June, a strike 45.00 covered call offers $417 in premium.

The annualized return by writing covered calls in April is 31.69%, in May is 18.59% and in June is 16.01%.

Chart for MET


Industrials Focus: Income Opportunities

An April covered call on UTX at strike $101.00 using 300 shares is offering an income potential of $237. In May, a strike 105.00 covered call offers $192 and in August, a strike 105.00 covered call offers $582 in premium.

The annualized return by writing covered calls in April is 24.16%, in May is 4.99% and in August is 5.22%.

Chart for UTX

An April covered call on UPS at strike $105.00 using 300 shares is offering an income potential of $285. In May, a strike 105.00 covered call offers $690 and in July, a strike 105.00 covered call offers $915 in premium.

The annualized return by writing covered calls in April is 27.80%, in May is 17.41% and in July is 10.61%.

Chart for UPS


Materials Focus: Income Opportunities

An April covered call on LYB at strike $87.50 using 300 shares is offering an income potential of $270. In May, a strike 87.50 covered call offers $960 and in June, a strike 87.50 covered call offers $1,110 in premium.

The annualized return by writing covered calls in April is 32.00%, in May is 29.85% and in June is 21.76%.

Chart for LYB

An April covered call on NEM at strike $27.00 using 300 shares is offering an income potential of $141. In May, a strike 27.00 covered call offers $405 and in June, a strike 27.00 covered call offers $516 in premium.

The annualized return by writing covered calls in April is 55.47%, in May is 42.12% and in June is 34.14%.

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 $270 and in August, a strike 67.50 covered call offers $510 in premium.

The annualized return by writing covered calls in April is 11.46%, in May is 10.64% and in August is 6.93%.

Chart for AEP

An August covered call on AES at strike $12.00 using 300 shares is offering an income potential of $150.

The annualized return by writing covered calls in August is 12.21%.

Chart for AES


Telecommunications Focus: Income Opportunities

An April covered call on CTL at strike $33.00 using 300 shares is offering an income potential of $90. In May, a strike 33.00 covered call offers $315 and in July, a strike 33.00 covered call offers $345 in premium.

The annualized return by writing covered calls in April is 28.60%, in May is 26.17% and in July is 13.12%.

Chart for CTL

A May covered call on VZ at strike $55.00 using 300 shares is offering an income potential of $135. In June, a strike 55.00 covered call offers $231 in premium.

The annualized return by writing covered calls in May is 6.48% and in June is 6.98%.

Chart for VZ

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

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