Income Alerts Newsletter for 04/12/2016

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 May 6 2016 are offering a 1.64% return, which annualizes at a rate of 23.91%.

Chart for QQQ

The DIA options at strike $175.50 for May 6 2016 are offering a 1.38% return, which annualizes at a rate of 20.08%.

Chart for DIA

The SPY options at strike $204.50 for May 6 2016 are offering a 1.34% return, which annualizes at a rate of 19.51%.

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 $114. In May, a strike 52.50 covered call offers $387 and in June, a strike 52.50 covered call offers $471 in premium.

The annualized return by writing covered calls in April is 54.80%, in May is 23.68% and in June is 17.05%.

Chart for QCOM

An April covered call on BABA at strike $78.00 using 300 shares is offering an income potential of $318. In May, a strike 80.00 covered call offers $684 and in July, a strike 80.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in April is 100.95%, in May is 27.58% and in July is 17.93%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on OXY at strike $71.00 using 300 shares is offering an income potential of $198. In May, a strike 72.50 covered call offers $444 and in August, a strike 72.50 covered call offers $876 in premium.

The annualized return by writing covered calls in April is 68.70%, in May is 19.48% and in August is 11.99%.

Chart for OXY

An April covered call on APC at strike $48.00 using 300 shares is offering an income potential of $336. In May, a strike 50.00 covered call offers $603 and in August, a strike 50.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in April is 176.17%, in May is 40.29% and in August is 27.01%.

Chart for APC


Healthcare Focus: Income Opportunities

An April covered call on ESRX at strike $70.00 using 300 shares is offering an income potential of $192. In May, a strike 70.00 covered call offers $696 and in June, a strike 70.00 covered call offers $867 in premium.

The annualized return by writing covered calls in April is 67.64%, in May is 31.41% and in June is 23.22%.

Chart for ESRX

An April covered call on MCK at strike $165.00 using 300 shares is offering an income potential of $180. In May, a strike 165.00 covered call offers $1,290 and in August, a strike 165.00 covered call offers $2,310 in premium.

The annualized return by writing covered calls in April is 27.07%, in May is 24.82% and in August is 13.87%.

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 $93. In May, a strike 105.00 covered call offers $138 and in June, a strike 105.00 covered call offers $225 in premium.

The annualized return by writing covered calls in April is 22.63%, in May is 4.20% and in June is 4.04%.

Chart for PM

A May covered call on ADM at strike $37.00 using 300 shares is offering an income potential of $237. In June, a strike 37.00 covered call offers $336 in premium.

The annualized return by writing covered calls in May is 20.47% and in June is 17.24%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

An April covered call on CMCSA at strike $61.50 using 300 shares is offering an income potential of $204. In May, a strike 62.50 covered call offers $333 and in July, a strike 62.50 covered call offers $627 in premium.

The annualized return by writing covered calls in April is 81.70%, in May is 16.79% and in July is 13.39%.

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 22.95% and in July is 18.15%.

Chart for FOXA


Financials Focus: Income Opportunities

An April covered call on AXP at strike $60.00 using 300 shares is offering an income potential of $132. In May, a strike 60.00 covered call offers $534 and in July, a strike 60.00 covered call offers $804 in premium.

The annualized return by writing covered calls in April is 54.11%, in May is 27.99% and in July is 17.84%.

Chart for AXP


Industrials Focus: Income Opportunities

An April covered call on UTX at strike $103.00 using 300 shares is offering an income potential of $120. In May, a strike 105.00 covered call offers $375 and in August, a strike 105.00 covered call offers $789 in premium.

The annualized return by writing covered calls in April is 28.70%, in May is 11.31% and in August is 7.36%.

Chart for UTX

An April covered call on UPS at strike $104.00 using 300 shares is offering an income potential of $183. In May, a strike 105.00 covered call offers $540 and in July, a strike 105.00 covered call offers $789 in premium.

The annualized return by writing covered calls in April is 43.13%, in May is 16.09% and in July is 9.88%.

Chart for UPS


Materials Focus: Income Opportunities

A May covered call on FCX at strike $10.00 using 300 shares is offering an income potential of $240. In June, a strike 10.00 covered call offers $318 in premium.

The annualized return by writing covered calls in May is 81.47% and in June is 65.40%.

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 $345 in premium.

The annualized return by writing covered calls in May is 39.96% and in August is 26.79%.

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 22.41% and in August is 14.03%.

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 $390 in premium.

The annualized return by writing covered calls in May is 9.49% and in July is 6.91%.

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 $240. In July, a strike 33.00 covered call offers $315 in premium.

The annualized return by writing covered calls in May is 23.34% and in July is 12.87%.

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 $600 and in June, a strike 52.50 covered call offers $750 in premium.

The annualized return by writing covered calls in April is 35.44%, in May is 36.68% and in June is 27.25%.

Chart for LVLT

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

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.