Income Alerts Newsletter for 04/07/2016

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 $111.00 for April 29 2016 are offering a 1.30% return, which annualizes at a rate of 21.56%.

Chart for QQQ

The DIA options at strike $177.50 for April 29 2016 are offering a 0.99% return, which annualizes at a rate of 16.47%.

Chart for DIA

The SPY options at strike $206.50 for April 29 2016 are offering a 1.21% return, which annualizes at a rate of 20.09%.

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 $141. In May, a strike 52.50 covered call offers $357 and in June, a strike 52.50 covered call offers $399 in premium.

The annualized return by writing covered calls in April is 38.01%, in May is 19.97% and in June is 13.68%.

Chart for QCOM

An April covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $375. 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 65.47%, in May is 32.88% and in July is 20.32%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on OXY at strike $70.50 using 300 shares is offering an income potential of $255. In May, a strike 72.50 covered call offers $405 and in August, a strike 72.50 covered call offers $822 in premium.

The annualized return by writing covered calls in April is 49.77%, in May is 16.28% and in August is 10.99%.

Chart for OXY

An April covered call on APC at strike $46.00 using 300 shares is offering an income potential of $384. In May, a strike 47.50 covered call offers $714 and in August, a strike 47.50 covered call offers $1,380 in premium.

The annualized return by writing covered calls in April is 116.84%, in May is 45.56% and in August is 30.25%.

Chart for APC


Healthcare Focus: Income Opportunities

An April covered call on ESRX at strike $69.50 using 300 shares is offering an income potential of $255. In May, a strike 70.00 covered call offers $651 and in June, a strike 70.00 covered call offers $819 in premium.

The annualized return by writing covered calls in April is 50.49%, in May is 26.89% and in June is 20.85%.

Chart for ESRX

An April covered call on MCK at strike $165.00 using 300 shares is offering an income potential of $450. In May, a strike 165.00 covered call offers $1,500 and in August, a strike 165.00 covered call offers $2,460 in premium.

The annualized return by writing covered calls in April is 37.62%, in May is 26.22% and in August is 14.30%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

An April covered call on PM at strike $102.00 using 300 shares is offering an income potential of $129. In May, a strike 105.00 covered call offers $195 and in June, a strike 105.00 covered call offers $318 in premium.

The annualized return by writing covered calls in April is 17.31%, in May is 5.36% and in June is 5.37%.

Chart for PM

An April covered call on WBA at strike $84.00 using 300 shares is offering an income potential of $291. In May, a strike 85.00 covered call offers $543 and in June, a strike 85.00 covered call offers $720 in premium.

The annualized return by writing covered calls in April is 47.56%, in May is 18.34% and in June is 14.97%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

An April covered call on CMCSA at strike $62.50 using 300 shares is offering an income potential of $138. In May, a strike 62.50 covered call offers $453 and in July, a strike 62.50 covered call offers $675 in premium.

The annualized return by writing covered calls in April is 30.22%, in May is 20.64% and in July is 13.70%.

Chart for CMCSA

An April covered call on FOXA at strike $29.00 using 300 shares is offering an income potential of $75. In May, a strike 29.00 covered call offers $270 and in July, a strike 29.00 covered call offers $390 in premium.

The annualized return by writing covered calls in April is 35.41%, in May is 26.68% and in July is 17.20%.

Chart for FOXA


Financials Focus: Income Opportunities

An April covered call on MET at strike $43.00 using 300 shares is offering an income potential of $207. In May, a strike 45.00 covered call offers $219 and in June, a strike 45.00 covered call offers $306 in premium.

The annualized return by writing covered calls in April is 66.17%, in May is 14.33% and in June is 12.32%.

Chart for MET

An April covered call on GS at strike $157.50 using 300 shares is offering an income potential of $420. In May, a strike 160.00 covered call offers $1,065 and in July, a strike 160.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in April is 36.92%, in May is 19.42% and in July is 13.66%.

Chart for GS


Industrials Focus: Income Opportunities

An April covered call on UTX at strike $101.00 using 300 shares is offering an income potential of $231. In May, a strike 105.00 covered call offers $204 and in August, a strike 105.00 covered call offers $564 in premium.

The annualized return by writing covered calls in April is 31.35%, in May is 5.66% and in August is 5.16%.

Chart for UTX

An April covered call on UPS at strike $105.00 using 300 shares is offering an income potential of $225. In May, a strike 105.00 covered call offers $687 and in July, a strike 105.00 covered call offers $915 in premium.

The annualized return by writing covered calls in April is 29.27%, in May is 18.55% and in July is 10.96%.

Chart for UPS


Materials Focus: Income Opportunities

An April covered call on FCX at strike $10.00 using 300 shares is offering an income potential of $81. In May, a strike 10.00 covered call offers $252 and in June, a strike 10.00 covered call offers $327 in premium.

The annualized return by writing covered calls in April is 117.24%, in May is 79.45% and in June is 64.86%.

Chart for FCX

A May covered call on HUN at strike $14.00 using 300 shares is offering an income potential of $180. In August, a strike 14.00 covered call offers $330 in premium.

The annualized return by writing covered calls in May is 40.04% and in August is 24.93%.

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 $150. In August, a strike 21.00 covered call offers $300 in premium.

The annualized return by writing covered calls in May is 20.51% and in August is 13.71%.

Chart for CNP

A May covered call on D at strike $75.00 using 300 shares is offering an income potential of $225. In July, a strike 75.00 covered call offers $375 in premium.

The annualized return by writing covered calls in May is 8.64% and in July is 6.38%.

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 $315. In July, a strike 33.00 covered call offers $390 in premium.

The annualized return by writing covered calls in May is 27.70% and in July is 15.21%.

Chart for CTL

An April covered call on LVLT at strike $52.50 using 300 shares is offering an income potential of $165. In May, a strike 52.50 covered call offers $645 and in June, a strike 52.50 covered call offers $750 in premium.

The annualized return by writing covered calls in April is 43.30%, in May is 35.73% and in June is 25.57%.

Chart for LVLT

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

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