Income Alerts Newsletter for 04/08/2016

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 29 2016 are offering a 1.34% return, which annualizes at a rate of 22.20%.

Chart for QQQ

The DIA options at strike $175.50 for April 29 2016 are offering a 1.15% return, which annualizes at a rate of 19.15%.

Chart for DIA

The SPY options at strike $204.00 for April 29 2016 are offering a 1.38% return, which annualizes at a rate of 22.84%.

Chart for SPY


Technology Focus: Income Opportunities

An April covered call on BABA at strike $78.00 using 300 shares is offering an income potential of $366. In May, a strike 80.00 covered call offers $750 and in July, a strike 80.00 covered call offers $1,095 in premium.

The annualized return by writing covered calls in April is 64.77%, in May is 27.61% and in July is 18.01%.

Chart for BABA

An April covered call on AAPL at strike $109.00 using 300 shares is offering an income potential of $396. In May, a strike 110.00 covered call offers $1,170 and in June, a strike 110.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in April is 49.93%, in May is 30.92% and in June is 20.91%.

Chart for AAPL


Energy Focus: Income Opportunities

An April covered call on OXY at strike $69.50 using 300 shares is offering an income potential of $288. In May, a strike 70.00 covered call offers $675 and in August, a strike 70.00 covered call offers $1,170 in premium.

The annualized return by writing covered calls in April is 56.90%, in May is 27.80% and in August is 16.10%.

Chart for OXY

An April covered call on APC at strike $46.00 using 300 shares is offering an income potential of $330. In May, a strike 47.50 covered call offers $720 and in August, a strike 47.50 covered call offers $1,380 in premium.

The annualized return by writing covered calls in April is 99.91%, in May is 45.93% and in August is 30.22%.

Chart for APC


Healthcare Focus: Income Opportunities

An April covered call on ESRX at strike $70.50 using 300 shares is offering an income potential of $258. In May, a strike 72.50 covered call offers $483 and in June, a strike 72.50 covered call offers $657 in premium.

The annualized return by writing covered calls in April is 50.41%, in May is 19.51% and in June is 16.36%.

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 $1,140 and in August, a strike 165.00 covered call offers $2,460 in premium.

The annualized return by writing covered calls in April is 38.08%, in May is 20.02% and in August is 14.49%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

An April covered call on PM at strike $101.00 using 300 shares is offering an income potential of $153. In May, a strike 105.00 covered call offers $162 and in June, a strike 105.00 covered call offers $282 in premium.

The annualized return by writing covered calls in April is 20.67%, in May is 4.48% and in June is 4.78%.

Chart for PM

An April covered call on CVS at strike $101.00 using 300 shares is offering an income potential of $309. In May, a strike 105.00 covered call offers $258 and in August, a strike 105.00 covered call offers $696 in premium.

The annualized return by writing covered calls in April is 41.81%, in May is 7.13% and in August is 6.36%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An April covered call on CMCSA at strike $61.50 using 300 shares is offering an income potential of $162. In May, a strike 62.50 covered call offers $375 and in July, a strike 62.50 covered call offers $606 in premium.

The annualized return by writing covered calls in April is 35.98%, in May is 17.24% and in July is 12.42%.

Chart for CMCSA

A May covered call on FOXA at strike $29.00 using 300 shares is offering an income potential of $210. In July, a strike 29.00 covered call offers $390 in premium.

The annualized return by writing covered calls in May is 20.85% and in July is 17.41%.

Chart for FOXA


Industrials Focus: Income Opportunities

An April covered call on UTX at strike $101.00 using 300 shares is offering an income potential of $306. In May, a strike 105.00 covered call offers $237 and in August, a strike 105.00 covered call offers $666 in premium.

The annualized return by writing covered calls in April is 41.42%, in May is 6.55% and in August is 6.08%.

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 $576 and in July, a strike 105.00 covered call offers $822 in premium.

The annualized return by writing covered calls in April is 38.19%, in May is 15.60% and in July is 9.88%.

Chart for UPS


Materials Focus: Income Opportunities

An April covered call on FCX at strike $9.00 using 300 shares is offering an income potential of $93. In May, a strike 9.00 covered call offers $267 and in June, a strike 9.00 covered call offers $336 in premium.

The annualized return by writing covered calls in April is 148.43%, in May is 93.57% and in June is 74.12%.

Chart for FCX

An April covered call on HUN at strike $13.00 using 300 shares is offering an income potential of $75. In May, a strike 13.00 covered call offers $240 and in August, a strike 13.00 covered call offers $405 in premium.

The annualized return by writing covered calls in April is 81.44%, in May is 55.77% and in August is 32.16%.

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 $135. In August, a strike 21.00 covered call offers $300 in premium.

The annualized return by writing covered calls in May is 18.41% and in August is 13.70%.

Chart for CNP

A May covered call on D at strike $75.00 using 300 shares is offering an income potential of $255. In July, a strike 75.00 covered call offers $375 in premium.

The annualized return by writing covered calls in May is 9.78% and in July is 6.36%.

Chart for D


Telecommunications Focus: Income Opportunities

An April covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $135. In May, a strike 32.00 covered call offers $375 and in July, a strike 32.00 covered call offers $465 in premium.

The annualized return by writing covered calls in April is 58.08%, in May is 33.86% and in July is 18.66%.

Chart for CTL

An April covered call on LVLT at strike $52.50 using 300 shares is offering an income potential of $75. In May, a strike 52.50 covered call offers $510 and in June, a strike 52.50 covered call offers $750 in premium.

The annualized return by writing covered calls in April is 19.88%, in May is 28.46% and in June is 26.00%.

Chart for LVLT

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

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