Income Alerts Newsletter for 04/12/2017

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 $131.50 for May 5 2017 are offering a 1.31% return, which annualizes at a rate of 19.93%.

Chart for QQQ

The DIA options at strike $206.50 for May 5 2017 are offering a 1.04% return, which annualizes at a rate of 15.86%.

Chart for DIA

The SPY options at strike $235.50 for May 5 2017 are offering a 1.12% return, which annualizes at a rate of 17.01%.

Chart for SPY


Technology Focus: Income Opportunities

An April covered call on BABA at strike $111.00 using 300 shares is offering an income potential of $360. In May, a strike 115.00 covered call offers $654 and in June, a strike 115.00 covered call offers $897 in premium.

The annualized return by writing covered calls in April is 36.45%, in May is 18.85% and in June is 15.16%.

Chart for BABA

An April covered call on FB at strike $140.00 using 300 shares is offering an income potential of $426. In May, a strike 140.00 covered call offers $1,305 and in June, a strike 140.00 covered call offers $1,635 in premium.

The annualized return by writing covered calls in April is 34.02%, in May is 30.03% and in June is 22.08%.

Chart for FB


Energy Focus: Income Opportunities

An April covered call on SLB at strike $80.00 using 300 shares is offering an income potential of $291. In May, a strike 80.00 covered call offers $600 and in June, a strike 80.00 covered call offers $768 in premium.

The annualized return by writing covered calls in April is 40.91%, in May is 24.11% and in June is 18.09%.

Chart for SLB

An April covered call on EOG at strike $98.00 using 300 shares is offering an income potential of $345. In May, a strike 100.00 covered call offers $714 and in July, a strike 100.00 covered call offers $1,335 in premium.

The annualized return by writing covered calls in April is 39.45%, in May is 23.32% and in July is 17.04%.

Chart for EOG


Healthcare Focus: Income Opportunities

An April covered call on ESRX at strike $67.00 using 300 shares is offering an income potential of $192. In May, a strike 67.50 covered call offers $495 and in June, a strike 67.50 covered call offers $672 in premium.

The annualized return by writing covered calls in April is 32.11%, in May is 23.71% and in June is 18.91%.

Chart for ESRX

An April covered call on JNJ at strike $125.00 using 300 shares is offering an income potential of $333. In May, a strike 125.00 covered call offers $591 and in June, a strike 125.00 covered call offers $684 in premium.

The annualized return by writing covered calls in April is 29.92%, in May is 15.08% and in June is 10.19%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

An April covered call on PM at strike $114.00 using 300 shares is offering an income potential of $306. In May, a strike 115.00 covered call offers $486 and in June, a strike 115.00 covered call offers $645 in premium.

The annualized return by writing covered calls in April is 30.11%, in May is 13.56% and in June is 10.53%.

Chart for PM

An April covered call on STZ at strike $175.00 using 300 shares is offering an income potential of $150. In May, a strike 175.00 covered call offers $600 and in July, a strike 175.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in April is 9.77%, in May is 11.12% and in July is 12.16%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

An April covered call on CBS at strike $68.50 using 300 shares is offering an income potential of $171. In May, a strike 70.00 covered call offers $366 and in June, a strike 70.00 covered call offers $531 in premium.

The annualized return by writing covered calls in April is 28.04%, in May is 17.09% and in June is 14.55%.

Chart for CBS

An April covered call on CMCSA at strike $37.50 using 300 shares is offering an income potential of $81. In May, a strike 37.50 covered call offers $267 and in June, a strike 37.50 covered call offers $357 in premium.

The annualized return by writing covered calls in April is 24.24%, in May is 22.92% and in June is 17.99%.

Chart for CMCSA


Financials Focus: Income Opportunities

An April covered call on MET at strike $53.00 using 300 shares is offering an income potential of $177. In May, a strike 55.00 covered call offers $219 and in June, a strike 55.00 covered call offers $339 in premium.

The annualized return by writing covered calls in April is 37.52%, in May is 13.13% and in June is 11.92%.

Chart for MET


Industrials Focus: Income Opportunities

A June covered call on GE at strike $31.00 using 300 shares is offering an income potential of $108.

The annualized return by writing covered calls in June is 6.61%.

Chart for GE

An April covered call on UNP at strike $108.00 using 300 shares is offering an income potential of $315. In May, a strike 110.00 covered call offers $666 and in June, a strike 110.00 covered call offers $864 in premium.

The annualized return by writing covered calls in April is 32.70%, in May is 19.71% and in June is 14.98%.

Chart for UNP


Materials Focus: Income Opportunities

A May covered call on FCX at strike $14.00 using 300 shares is offering an income potential of $177. In June, a strike 14.00 covered call offers $243 in premium.

The annualized return by writing covered calls in May is 42.38% and in June is 34.45%.

Chart for FCX

A July covered call on MON at strike $120.00 using 300 shares is offering an income potential of $270.

The annualized return by writing covered calls in July is 2.80%.

Chart for MON


Utilities Focus: Income Opportunities

A May covered call on NRG at strike $19.00 using 300 shares is offering an income potential of $195. In June, a strike 19.00 covered call offers $285 in premium.

The annualized return by writing covered calls in May is 33.68% and in June is 29.14%.

Chart for NRG

An April covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $135. In May, a strike 67.50 covered call offers $285 and in August, a strike 67.50 covered call offers $525 in premium.

The annualized return by writing covered calls in April is 22.31%, in May is 13.38% and in August is 7.49%.

Chart for AEP


Telecommunications Focus: Income Opportunities

A May covered call on CTL at strike $25.00 using 300 shares is offering an income potential of $240. In July, a strike 25.00 covered call offers $270 in premium.

The annualized return by writing covered calls in May is 31.07% and in July is 13.42%.

Chart for CTL

A May covered call on LVLT at strike $60.00 using 300 shares is offering an income potential of $135. In June, a strike 60.00 covered call offers $180 in premium.

The annualized return by writing covered calls in May is 7.18% and in June is 5.59%.

Chart for LVLT

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

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