Income Alerts Newsletter for 04/19/2016

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 $111.50 for May 13 2016 are offering a 1.22% return, which annualizes at a rate of 17.80%.

Chart for QQQ

The DIA options at strike $180.00 for May 13 2016 are offering a 1.09% return, which annualizes at a rate of 15.93%.

Chart for DIA

The SPY options at strike $209.50 for May 13 2016 are offering a 1.09% return, which annualizes at a rate of 15.87%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on QCOM at strike $52.00 using 300 shares is offering an income potential of $441. In June, a strike 52.50 covered call offers $417 and in July, a strike 52.50 covered call offers $486 in premium.

The annualized return by writing covered calls in May is 32.47%, in June is 16.58% and in July is 13.31%.

Chart for QCOM

A May covered call on BABA at strike $79.50 using 300 shares is offering an income potential of $855. In July, a strike 80.00 covered call offers $1,155 and in October, a strike 80.00 covered call offers $1,755 in premium.

The annualized return by writing covered calls in May is 41.39%, in July is 21.01% and in October is 15.61%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on EOG at strike $77.50 using 300 shares is offering an income potential of $900. In June, a strike 77.50 covered call offers $1,170 and in July, a strike 77.50 covered call offers $1,395 in premium.

The annualized return by writing covered calls in May is 44.58%, in June is 31.73% and in July is 26.20%.

Chart for EOG

A May covered call on OXY at strike $75.00 using 300 shares is offering an income potential of $375. In June, a strike 75.00 covered call offers $516 and in August, a strike 75.00 covered call offers $840 in premium.

The annualized return by writing covered calls in May is 19.19%, in June is 14.38% and in August is 11.69%.

Chart for OXY


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $72.50 using 300 shares is offering an income potential of $579. In June, a strike 72.50 covered call offers $753 and in July, a strike 72.50 covered call offers $861 in premium.

The annualized return by writing covered calls in May is 30.46%, in June is 21.61% and in July is 17.02%.

Chart for ESRX

A May covered call on MRK at strike $57.00 using 300 shares is offering an income potential of $264. In June, a strike 57.50 covered call offers $276 and in July, a strike 57.50 covered call offers $345 in premium.

The annualized return by writing covered calls in May is 17.50%, in June is 9.90% and in July is 8.52%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A May covered call on CVS at strike $103.00 using 300 shares is offering an income potential of $471. In August, a strike 105.00 covered call offers $726 and in November, a strike 105.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in May is 17.21%, in August is 7.12% and in November is 6.80%.

Chart for CVS

A May covered call on KO at strike $47.00 using 300 shares is offering an income potential of $135. In June, a strike 47.00 covered call offers $186 and in July, a strike 47.00 covered call offers $228 in premium.

The annualized return by writing covered calls in May is 10.87%, in June is 8.14% and in July is 6.86%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

A May covered call on GM at strike $32.00 using 300 shares is offering an income potential of $189. In June, a strike 32.00 covered call offers $252 and in September, a strike 32.00 covered call offers $396 in premium.

The annualized return by writing covered calls in May is 22.71%, in June is 16.50% and in September is 10.57%.

Chart for GM

A May covered call on HD at strike $140.00 using 300 shares is offering an income potential of $387. In June, a strike 140.00 covered call offers $612 and in July, a strike 140.00 covered call offers $795 in premium.

The annualized return by writing covered calls in May is 10.53%, in June is 9.06% and in July is 8.10%.

Chart for HD


Financials Focus: Income Opportunities

A June covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $75. In July, a strike 15.00 covered call offers $108 in premium.

The annualized return by writing covered calls in June is 10.75% and in July is 10.69%.

Chart for BAC

A May covered call on MS at strike $26.00 using 300 shares is offering an income potential of $189. In June, a strike 26.00 covered call offers $285 and in July, a strike 26.00 covered call offers $354 in premium.

The annualized return by writing covered calls in May is 27.76%, in June is 22.94% and in July is 19.71%.

Chart for MS


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $81.00 using 300 shares is offering an income potential of $738. In June, a strike 82.50 covered call offers $633 and in August, a strike 82.50 covered call offers $975 in premium.

The annualized return by writing covered calls in May is 34.70%, in June is 16.03% and in August is 12.32%.

Chart for UNP

A May covered call on UPS at strike $110.00 using 300 shares is offering an income potential of $159. In June, a strike 110.00 covered call offers $252 and in July, a strike 110.00 covered call offers $348 in premium.

The annualized return by writing covered calls in May is 5.55%, in June is 4.77% and in July is 4.53%.

Chart for UPS


Materials Focus: Income Opportunities

A May covered call on CF at strike $31.50 using 300 shares is offering an income potential of $441. In June, a strike 35.00 covered call offers $198 and in August, a strike 35.00 covered call offers $378 in premium.

The annualized return by writing covered calls in May is 54.38%, in June is 12.86% and in August is 12.32%.

Chart for CF

A May covered call on LYB at strike $90.00 using 300 shares is offering an income potential of $600. In June, a strike 90.00 covered call offers $810 and in September, a strike 90.00 covered call offers $1,410 in premium.

The annualized return by writing covered calls in May is 25.58%, in June is 18.83% and in September is 13.47%.

Chart for LYB


Utilities Focus: Income Opportunities

A May covered call on DUK at strike $82.50 using 300 shares is offering an income potential of $120. In June, a strike 82.50 covered call offers $195 and in July, a strike 82.50 covered call offers $300 in premium.

The annualized return by writing covered calls in May is 5.53%, in June is 4.88% and in July is 5.17%.

Chart for DUK

A May covered call on ED at strike $77.50 using 300 shares is offering an income potential of $180. In June, a strike 77.50 covered call offers $270 and in August, a strike 77.50 covered call offers $435 in premium.

The annualized return by writing covered calls in May is 8.83%, in June is 7.19% and in August is 5.74%.

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 $195. In July, a strike 33.00 covered call offers $300 and in October, a strike 33.00 covered call offers $435 in premium.

The annualized return by writing covered calls in May is 22.77%, in July is 13.14% and in October is 9.20%.

Chart for CTL

A May covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $525. In June, a strike 105.00 covered call offers $765 and in September, a strike 105.00 covered call offers $1,500 in premium.

The annualized return by writing covered calls in May is 19.27%, in June is 15.31% and in September is 12.35%.

Chart for SBAC

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

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