Income Alerts Newsletter for 04/13/2016

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 $110.00 for May 6 2016 are offering a 1.46% return, which annualizes at a rate of 22.26%.

Chart for QQQ

The DIA options at strike $177.50 for May 6 2016 are offering a 1.14% return, which annualizes at a rate of 17.28%.

Chart for DIA

The SPY options at strike $206.00 for May 6 2016 are offering a 1.33% return, which annualizes at a rate of 20.21%.

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 $99. In May, a strike 52.50 covered call offers $351 and in June, a strike 52.50 covered call offers $387 in premium.

The annualized return by writing covered calls in April is 59.64%, in May is 22.05% and in June is 14.19%.

Chart for QCOM

An April covered call on BABA at strike $78.00 using 300 shares is offering an income potential of $165. In May, a strike 80.00 covered call offers $687 and in July, a strike 80.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in April is 64.92%, in May is 28.36% and in July is 17.81%.

Chart for BABA


Energy Focus: Income Opportunities

An April covered call on EOG at strike $78.00 using 300 shares is offering an income potential of $129. In May, a strike 80.00 covered call offers $612 and in July, a strike 80.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in April is 50.90%, in May is 25.30% and in July is 19.81%.

Chart for EOG

An April covered call on OXY at strike $72.50 using 300 shares is offering an income potential of $201. In May, a strike 72.50 covered call offers $690 and in August, a strike 72.50 covered call offers $1,125 in premium.

The annualized return by writing covered calls in April is 85.17%, in May is 30.69% and in August is 15.33%.

Chart for OXY


Healthcare Focus: Income Opportunities

An April covered call on ESRX at strike $70.50 using 300 shares is offering an income potential of $159. In May, a strike 72.50 covered call offers $465 and in June, a strike 72.50 covered call offers $609 in premium.

The annualized return by writing covered calls in April is 69.36%, in May is 21.11% and in June is 16.21%.

Chart for ESRX

An April covered call on MRK at strike $55.50 using 300 shares is offering an income potential of $75. In May, a strike 57.50 covered call offers $165 and in June, a strike 57.50 covered call offers $210 in premium.

The annualized return by writing covered calls in April is 41.41%, in May is 9.39% and in June is 6.98%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An April covered call on CVS at strike $102.00 using 300 shares is offering an income potential of $78. In May, a strike 105.00 covered call offers $198 and in August, a strike 105.00 covered call offers $672 in premium.

The annualized return by writing covered calls in April is 23.50%, in May is 6.14% and in August is 6.35%.

Chart for CVS

A May covered call on KO at strike $47.00 using 300 shares is offering an income potential of $237. In June, a strike 47.00 covered call offers $291 in premium.

The annualized return by writing covered calls in May is 16.12% and in June is 11.57%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

An April covered call on HD at strike $135.00 using 300 shares is offering an income potential of $138. In May, a strike 135.00 covered call offers $900 and in June, a strike 135.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in April is 31.34%, in May is 21.37% and in June is 15.64%.

Chart for HD

An April covered call on AMZN at strike $605.00 using 300 shares is offering an income potential of $1,170. In May, a strike 605.00 covered call offers $9,105 and in June, a strike 605.00 covered call offers $10,815 in premium.

The annualized return by writing covered calls in April is 59.38%, in May is 49.59% and in June is 34.63%.

Chart for AMZN


Financials Focus: Income Opportunities

An April covered call on MET at strike $43.50 using 300 shares is offering an income potential of $90. In May, a strike 45.00 covered call offers $195 and in June, a strike 45.00 covered call offers $291 in premium.

The annualized return by writing covered calls in April is 63.87%, in May is 14.31% and in June is 12.53%.

Chart for MET

An April covered call on GS at strike $155.00 using 300 shares is offering an income potential of $414. In May, a strike 155.00 covered call offers $1,515 and in July, a strike 155.00 covered call offers $2,310 in premium.

The annualized return by writing covered calls in April is 82.34%, in May is 31.66% and in July is 20.18%.

Chart for GS


Industrials Focus: Income Opportunities

An April covered call on UNP at strike $80.00 using 300 shares is offering an income potential of $186. In May, a strike 80.00 covered call offers $753 and in August, a strike 80.00 covered call offers $1,245 in premium.

The annualized return by writing covered calls in April is 71.60%, in May is 30.46% and in August is 15.44%.

Chart for UNP

An April covered call on UPS at strike $106.00 using 300 shares is offering an income potential of $90. In May, a strike 110.00 covered call offers $180 and in July, a strike 110.00 covered call offers $381 in premium.

The annualized return by writing covered calls in April is 26.09%, in May is 5.37% and in July is 4.69%.

Chart for UPS


Materials Focus: Income Opportunities

A May covered call on LYB at strike $90.00 using 300 shares is offering an income potential of $570. In June, a strike 90.00 covered call offers $840 in premium.

The annualized return by writing covered calls in May is 20.68% and in June is 17.93%.

Chart for LYB

An April covered call on NEM at strike $31.00 using 300 shares is offering an income potential of $120. In May, a strike 31.00 covered call offers $513 and in June, a strike 31.00 covered call offers $696 in premium.

The annualized return by writing covered calls in April is 120.74%, in May is 55.34% and in June is 44.64%.

Chart for NEM


Utilities Focus: Income Opportunities

A May covered call on DUK at strike $82.50 using 300 shares is offering an income potential of $165. In July, a strike 82.50 covered call offers $345 in premium.

The annualized return by writing covered calls in May is 6.46% and in July is 5.59%.

Chart for DUK

A May covered call on ED at strike $77.50 using 300 shares is offering an income potential of $255. In August, a strike 77.50 covered call offers $555 in premium.

The annualized return by writing covered calls in May is 10.58% and in August is 7.00%.

Chart for ED


Telecommunications Focus: Income Opportunities

A May covered call on CTL at strike $33.00 using 300 shares is offering an income potential of $225. In July, a strike 33.00 covered call offers $315 in premium.

The annualized return by writing covered calls in May is 22.46% and in July is 13.03%.

Chart for CTL

A May covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $435. In June, a strike 105.00 covered call offers $690 in premium.

The annualized return by writing covered calls in May is 13.71% and in June is 12.77%.

Chart for SBAC

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

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