Income Alerts Newsletter for 04/06/2016

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 29 2016 are offering a 1.69% return, which annualizes at a rate of 26.83%.

Chart for QQQ

The DIA options at strike $176.00 for April 29 2016 are offering a 1.32% return, which annualizes at a rate of 20.94%.

Chart for DIA

The SPY options at strike $204.50 for April 29 2016 are offering a 1.35% return, which annualizes at a rate of 21.35%.

Chart for SPY


Technology Focus: Income Opportunities

An April covered call on BABA at strike $77.50 using 300 shares is offering an income potential of $411. In May, a strike 77.50 covered call offers $1,050 and in July, a strike 77.50 covered call offers $1,410 in premium.

The annualized return by writing covered calls in April is 65.84%, in May is 38.46% and in July is 23.39%.

Chart for BABA

An April covered call on AAPL at strike $110.00 using 300 shares is offering an income potential of $447. In May, a strike 110.00 covered call offers $1,170 and in June, a strike 110.00 covered call offers $1,395 in premium.

The annualized return by writing covered calls in April is 50.21%, in May is 29.87% and in June is 22.11%.

Chart for AAPL


Energy Focus: Income Opportunities

An April covered call on SLB at strike $73.00 using 300 shares is offering an income potential of $300. In May, a strike 75.00 covered call offers $489 and in August, a strike 75.00 covered call offers $930 in premium.

The annualized return by writing covered calls in April is 50.93%, in May is 18.61% and in August is 11.96%.

Chart for SLB

An April covered call on CVX at strike $93.00 using 300 shares is offering an income potential of $402. In May, a strike 95.00 covered call offers $603 and in June, a strike 95.00 covered call offers $744 in premium.

The annualized return by writing covered calls in April is 53.55%, in May is 17.98% and in June is 13.75%.

Chart for CVX


Healthcare Focus: Income Opportunities

An April covered call on MRK at strike $54.50 using 300 shares is offering an income potential of $138. In May, a strike 55.00 covered call offers $318 and in June, a strike 55.00 covered call offers $402 in premium.

The annualized return by writing covered calls in April is 31.22%, in May is 16.17% and in June is 12.67%.

Chart for MRK

An April covered call on PFE at strike $31.50 using 300 shares is offering an income potential of $126. In May, a strike 32.00 covered call offers $159 and in June, a strike 32.00 covered call offers $210 in premium.

The annualized return by writing covered calls in April is 49.55%, in May is 13.94% and in June is 11.42%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

An April covered call on PM at strike $101.00 using 300 shares is offering an income potential of $159. In May, a strike 105.00 covered call offers $135 and in June, a strike 105.00 covered call offers $240 in premium.

The annualized return by writing covered calls in April is 19.40%, in May is 3.66% and in June is 4.02%.

Chart for PM

An April covered call on WBA at strike $83.50 using 300 shares is offering an income potential of $375. In May, a strike 85.00 covered call offers $540 and in June, a strike 85.00 covered call offers $690 in premium.

The annualized return by writing covered calls in April is 55.57%, in May is 17.90% and in June is 14.19%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

An April covered call on CMCSA at strike $61.50 using 300 shares is offering an income potential of $156. In May, a strike 62.50 covered call offers $321 and in July, a strike 62.50 covered call offers $519 in premium.

The annualized return by writing covered calls in April is 31.31%, in May is 14.45% and in July is 10.53%.

Chart for CMCSA

A May covered call on FOXA at strike $29.00 using 300 shares is offering an income potential of $240. In July, a strike 29.00 covered call offers $345 in premium.

The annualized return by writing covered calls in May is 23.55% and in July is 15.28%.

Chart for FOXA


Financials Focus: Income Opportunities

An April covered call on GS at strike $157.50 using 300 shares is offering an income potential of $483. In May, a strike 160.00 covered call offers $1,080 and in July, a strike 160.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in April is 38.22%, in May is 19.24% and in July is 13.51%.

Chart for GS

An April covered call on AXP at strike $60.00 using 300 shares is offering an income potential of $231. In May, a strike 60.00 covered call offers $603 and in July, a strike 60.00 covered call offers $828 in premium.

The annualized return by writing covered calls in April is 47.53%, in May is 28.16% and in July is 17.46%.

Chart for AXP


Industrials Focus: Income Opportunities

An April covered call on UTX at strike $100.00 using 300 shares is offering an income potential of $321. In May, a strike 100.00 covered call offers $699 and in August, a strike 100.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in April is 39.53%, in May is 19.38% and in August is 10.76%.

Chart for UTX

An April covered call on UPS at strike $104.00 using 300 shares is offering an income potential of $291. In May, a strike 105.00 covered call offers $573 and in July, a strike 105.00 covered call offers $798 in premium.

The annualized return by writing covered calls in April is 34.39%, in May is 15.19% and in July is 9.49%.

Chart for UPS


Materials Focus: Income Opportunities

An April covered call on FCX at strike $9.50 using 300 shares is offering an income potential of $114. In May, a strike 10.00 covered call offers $225 and in June, a strike 10.00 covered call offers $288 in premium.

The annualized return by writing covered calls in April is 154.80%, in May is 70.82% and in June is 57.28%.

Chart for FCX

A May covered call on HUN at strike $14.00 using 300 shares is offering an income potential of $165. In August, a strike 14.00 covered call offers $405 in premium.

The annualized return by writing covered calls in May is 35.69% and in August is 30.97%.

Chart for HUN


Utilities Focus: Income Opportunities

A May covered call on CNP at strike $21.00 using 300 shares is offering an income potential of $225. In August, a strike 21.00 covered call offers $300 in premium.

The annualized return by writing covered calls in May is 30.79% and in August is 13.76%.

Chart for CNP

A May covered call on D at strike $75.00 using 300 shares is offering an income potential of $270. In July, a strike 75.00 covered call offers $405 in premium.

The annualized return by writing covered calls in May is 10.12% and in July is 6.80%.

Chart for D


Telecommunications Focus: Income Opportunities

A May covered call on CTL at strike $33.00 using 300 shares is offering an income potential of $270. In July, a strike 33.00 covered call offers $360 in premium.

The annualized return by writing covered calls in May is 23.40% and in July is 14.03%.

Chart for CTL

An April covered call on LVLT at strike $52.50 using 300 shares is offering an income potential of $120. In May, a strike 52.50 covered call offers $555 and in June, a strike 52.50 covered call offers $930 in premium.

The annualized return by writing covered calls in April is 28.63%, in May is 30.28% and in June is 32.09%.

Chart for LVLT

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

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