Income Alerts Newsletter for 04/18/2017

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 12 2017 are offering a 1.40% return, which annualizes at a rate of 20.38%.

Chart for QQQ

The DIA options at strike $206.50 for May 12 2017 are offering a 1.11% return, which annualizes at a rate of 16.18%.

Chart for DIA

The SPY options at strike $235.00 for May 10 2017 are offering a 1.14% return, which annualizes at a rate of 18.13%.

Chart for SPY


Technology Focus: Income Opportunities

An April covered call on BABA at strike $112.00 using 300 shares is offering an income potential of $273. In May, a strike 115.00 covered call offers $753 and in June, a strike 115.00 covered call offers $990 in premium.

The annualized return by writing covered calls in April is 59.93%, in May is 25.41% and in June is 18.21%.

Chart for BABA

An April covered call on FB at strike $142.00 using 300 shares is offering an income potential of $198. In May, a strike 145.00 covered call offers $717 and in June, a strike 145.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in April is 34.23%, in May is 19.01% and in June is 14.74%.

Chart for FB


Energy Focus: Income Opportunities

An April covered call on HES at strike $49.50 using 300 shares is offering an income potential of $150. In May, a strike 50.00 covered call offers $462 and in June, a strike 50.00 covered call offers $687 in premium.

The annualized return by writing covered calls in April is 74.63%, in May is 35.58% and in June is 29.08%.

Chart for HES

A May covered call on OXY at strike $65.00 using 300 shares is offering an income potential of $330. In August, a strike 65.00 covered call offers $663 in premium.

The annualized return by writing covered calls in May is 19.33% and in August is 10.52%.

Chart for OXY


Healthcare Focus: Income Opportunities

An April covered call on ESRX at strike $67.00 using 300 shares is offering an income potential of $114. In May, a strike 67.50 covered call offers $438 and in June, a strike 67.50 covered call offers $606 in premium.

The annualized return by writing covered calls in April is 41.85%, in May is 24.76% and in June is 18.70%.

Chart for ESRX

An April covered call on JNJ at strike $126.00 using 300 shares is offering an income potential of $363. In May, a strike 130.00 covered call offers $168 and in June, a strike 130.00 covered call offers $267 in premium.

The annualized return by writing covered calls in April is 70.94%, in May is 4.95% and in June is 4.27%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

A May covered call on CVS at strike $80.00 using 300 shares is offering an income potential of $339. In June, a strike 80.00 covered call offers $462 in premium.

The annualized return by writing covered calls in May is 16.11% and in June is 11.94%.

Chart for CVS

An April covered call on WBA at strike $83.50 using 300 shares is offering an income potential of $93. In May, a strike 85.00 covered call offers $231 and in June, a strike 85.00 covered call offers $441 in premium.

The annualized return by writing covered calls in April is 27.32%, in May is 10.34% and in June is 10.77%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

An April covered call on CBS at strike $67.50 using 300 shares is offering an income potential of $123. In May, a strike 67.50 covered call offers $498 and in June, a strike 67.50 covered call offers $684 in premium.

The annualized return by writing covered calls in April is 44.83%, in May is 28.02% and in June is 21.02%.

Chart for CBS

An April covered call on HD at strike $148.00 using 300 shares is offering an income potential of $147. In May, a strike 150.00 covered call offers $600 and in June, a strike 150.00 covered call offers $744 in premium.

The annualized return by writing covered calls in April is 24.36%, in May is 15.22% and in June is 10.25%.

Chart for HD


Industrials Focus: Income Opportunities

An April covered call on DHR at strike $87.50 using 300 shares is offering an income potential of $150. In May, a strike 87.50 covered call offers $315 and in June, a strike 87.50 covered call offers $435 in premium.

The annualized return by writing covered calls in April is 42.34%, in May is 13.56% and in June is 10.18%.

Chart for DHR

A May covered call on UTX at strike $115.00 using 300 shares is offering an income potential of $321. In June, a strike 115.00 covered call offers $486 in premium.

The annualized return by writing covered calls in May is 10.55% and in June is 8.68%.

Chart for UTX


Materials Focus: Income Opportunities

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 2.97%.

Chart for MON

A May covered call on NEM at strike $35.00 using 300 shares is offering an income potential of $372. In June, a strike 35.00 covered call offers $513 in premium.

The annualized return by writing covered calls in May is 41.12% and in June is 31.12%.

Chart for NEM


Utilities Focus: Income Opportunities

A May covered call on NRG at strike $19.00 using 300 shares is offering an income potential of $150. In June, a strike 19.00 covered call offers $240 in premium.

The annualized return by writing covered calls in May is 30.81% and in June is 27.12%.

Chart for NRG

An August covered call on AEP at strike $70.00 using 300 shares is offering an income potential of $255.

The annualized return by writing covered calls in August is 3.74%.

Chart for AEP


Telecommunications Focus: Income Opportunities

A May covered call on CTL at strike $26.00 using 300 shares is offering an income potential of $120. In July, a strike 26.00 covered call offers $195 in premium.

The annualized return by writing covered calls in May is 17.77% and in July is 10.03%.

Chart for CTL

A May covered call on LVLT at strike $60.00 using 300 shares is offering an income potential of $150. In June, a strike 60.00 covered call offers $285 in premium.

The annualized return by writing covered calls in May is 9.32% and in June is 9.65%.

Chart for LVLT

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

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