Income Alerts Newsletter for 04/20/2016

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 $111.00 for May 13 2016 are offering a 1.28% return, which annualizes at a rate of 19.51%.

Chart for QQQ

The DIA options at strike $180.50 for May 13 2016 are offering a 1.05% return, which annualizes at a rate of 16.72%.

Chart for DIA

The SPY options at strike $210.00 for May 13 2016 are offering a 1.09% return, which annualizes at a rate of 16.63%.

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 $444. In June, a strike 52.50 covered call offers $444 and in July, a strike 52.50 covered call offers $513 in premium.

The annualized return by writing covered calls in May is 34.61%, in June is 18.18% and in July is 14.31%.

Chart for QCOM

A May covered call on BABA at strike $79.50 using 300 shares is offering an income potential of $930. In June, a strike 82.50 covered call offers $732 and in July, a strike 80.00 covered call offers $1,245 in premium.

The annualized return by writing covered calls in May is 47.80%, in June is 19.60% and in July is 23.12%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on SLB at strike $80.00 using 300 shares is offering an income potential of $492. In June, a strike 80.00 covered call offers $738 and in August, a strike 80.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 23.98%, in June is 19.39% and in August is 14.05%.

Chart for SLB

A May covered call on APC at strike $51.00 using 300 shares is offering an income potential of $732. In June, a strike 52.50 covered call offers $783 and in August, a strike 52.50 covered call offers $1,215 in premium.

The annualized return by writing covered calls in May is 59.74%, in June is 33.69% and in August is 26.07%.

Chart for APC


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $72.50 using 300 shares is offering an income potential of $606. In June, a strike 72.50 covered call offers $771 and in July, a strike 72.50 covered call offers $930 in premium.

The annualized return by writing covered calls in May is 32.76%, in June is 22.40% and in July is 18.57%.

Chart for ESRX

A May covered call on PFE at strike $33.00 using 300 shares is offering an income potential of $141. In June, a strike 33.00 covered call offers $195 and in July, a strike 33.00 covered call offers $246 in premium.

The annualized return by writing covered calls in May is 16.54%, in June is 12.26% and in July is 10.61%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A May covered call on KO at strike $47.00 using 300 shares is offering an income potential of $177. In June, a strike 47.00 covered call offers $234 and in July, a strike 47.00 covered call offers $273 in premium.

The annualized return by writing covered calls in May is 14.63%, in June is 10.36% and in July is 8.26%.

Chart for KO

A May covered call on PEP at strike $105.00 using 300 shares is offering an income potential of $354. In June, a strike 105.00 covered call offers $450 and in July, a strike 105.00 covered call offers $582 in premium.

The annualized return by writing covered calls in May is 13.05%, in June is 8.87% and in July is 7.86%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A May covered call on GM at strike $32.00 using 300 shares is offering an income potential of $291. In June, a strike 32.00 covered call offers $342 and in September, a strike 32.00 covered call offers $468 in premium.

The annualized return by writing covered calls in May is 35.69%, in June is 22.49% and in September is 12.40%.

Chart for GM

A May covered call on AMZN at strike $630.00 using 300 shares is offering an income potential of $8,505. In June, a strike 630.00 covered call offers $9,735 and in July, a strike 630.00 covered call offers $11,025 in premium.

The annualized return by writing covered calls in May is 55.67%, in June is 33.71% and in July is 26.08%.

Chart for AMZN


Financials Focus: Income Opportunities

A May covered call on BAC at strike $14.50 using 300 shares is offering an income potential of $123. In June, a strike 15.00 covered call offers $99 and in July, a strike 15.00 covered call offers $141 in premium.

The annualized return by writing covered calls in May is 33.31%, in June is 14.22% and in July is 13.94%.

Chart for BAC

A May covered call on WFC at strike $50.00 using 300 shares is offering an income potential of $219. In June, a strike 50.00 covered call offers $330 and in July, a strike 50.00 covered call offers $432 in premium.

The annualized return by writing covered calls in May is 16.94%, in June is 13.72% and in July is 12.33%.

Chart for WFC


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $82.50 using 300 shares is offering an income potential of $705. In June, a strike 82.50 covered call offers $822 and in August, a strike 82.50 covered call offers $1,170 in premium.

The annualized return by writing covered calls in May is 34.63%, in June is 21.32% and in August is 14.89%.

Chart for UNP

A May covered call on UTX at strike $106.00 using 300 shares is offering an income potential of $462. In June, a strike 110.00 covered call offers $222 and in August, a strike 110.00 covered call offers $474 in premium.

The annualized return by writing covered calls in May is 16.98%, in June is 4.32% and in August is 4.53%.

Chart for UTX


Materials Focus: Income Opportunities

A May covered call on CF at strike $34.00 using 300 shares is offering an income potential of $435. In June, a strike 35.00 covered call offers $441 and in August, a strike 35.00 covered call offers $633 in premium.

The annualized return by writing covered calls in May is 52.94%, in June is 28.22% and in August is 19.98%.

Chart for CF

A May covered call on MON at strike $93.50 using 300 shares is offering an income potential of $897. In June, a strike 95.00 covered call offers $975 and in July, a strike 95.00 covered call offers $1,215 in premium.

The annualized return by writing covered calls in May is 39.00%, in June is 22.33% and in July is 19.04%.

Chart for MON


Utilities Focus: Income Opportunities

A May covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $360. In June, a strike 120.00 covered call offers $510 and in September, a strike 120.00 covered call offers $900 in premium.

The annualized return by writing covered calls in May is 11.71%, in June is 8.88% and in September is 6.30%.

Chart for NEE

A May covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $120. In June, a strike 67.50 covered call offers $210 and in August, a strike 67.50 covered call offers $375 in premium.

The annualized return by writing covered calls in May is 7.20%, in June is 6.65% and in August is 5.79%.

Chart for AEP


Telecommunications Focus: Income Opportunities

A May covered call on CTL at strike $33.00 using 300 shares is offering an income potential of $270. In June, a strike 33.00 covered call offers $300 and in July, a strike 33.00 covered call offers $345 in premium.

The annualized return by writing covered calls in May is 33.31%, in June is 19.51% and in July is 15.29%.

Chart for CTL

A May covered call on T at strike $39.00 using 300 shares is offering an income potential of $186. In June, a strike 39.00 covered call offers $237 and in July, a strike 39.00 covered call offers $246 in premium.

The annualized return by writing covered calls in May is 18.46%, in June is 12.60% and in July is 8.93%.

Chart for T

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

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