Income Alerts Newsletter for 04/21/2016

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 1.22% return, which annualizes at a rate of 19.31%.

Chart for QQQ

The DIA options at strike $181.00 for May 13 2016 are offering a 0.77% return, which annualizes at a rate of 12.30%.

Chart for DIA

The SPY options at strike $210.50 for May 13 2016 are offering a 0.96% return, which annualizes at a rate of 15.17%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on QCOM at strike $52.50 using 300 shares is offering an income potential of $438. In June, a strike 52.50 covered call offers $483 and in July, a strike 52.50 covered call offers $579 in premium.

The annualized return by writing covered calls in May is 33.95%, in June is 19.73% and in July is 16.14%.

Chart for QCOM

A May covered call on BABA at strike $81.50 using 300 shares is offering an income potential of $660. In June, a strike 82.50 covered call offers $732 and in July, a strike 82.50 covered call offers $1,140 in premium.

The annualized return by writing covered calls in May is 32.78%, in June is 19.16% and in July is 20.59%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on SLB at strike $81.50 using 300 shares is offering an income potential of $381. In June, a strike 82.50 covered call offers $423 and in August, a strike 82.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in May is 18.73%, in June is 10.95% and in August is 13.09%.

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 $786 and in August, a strike 52.50 covered call offers $1,230 in premium.

The annualized return by writing covered calls in May is 59.58%, in June is 33.74% and in August is 26.35%.

Chart for APC


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $73.50 using 300 shares is offering an income potential of $465. In June, a strike 75.00 covered call offers $573 and in July, a strike 75.00 covered call offers $582 in premium.

The annualized return by writing covered calls in May is 25.48%, in June is 16.58% and in July is 11.43%.

Chart for ESRX

A May covered call on PFE at strike $33.50 using 300 shares is offering an income potential of $81. In June, a strike 34.00 covered call offers $108 and in July, a strike 34.00 covered call offers $162 in premium.

The annualized return by writing covered calls in May is 9.65%, in June is 6.78% and in July is 6.93%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A May covered call on PEP at strike $103.00 using 300 shares is offering an income potential of $552. In June, a strike 105.00 covered call offers $432 and in July, a strike 105.00 covered call offers $417 in premium.

The annualized return by writing covered calls in May is 21.54%, in June is 8.82% and in July is 5.77%.

Chart for PEP

A May covered call on PM at strike $99.00 using 300 shares is offering an income potential of $348. In June, a strike 100.00 covered call offers $393 and in September, a strike 100.00 covered call offers $666 in premium.

The annualized return by writing covered calls in May is 14.08%, in June is 8.37% and in September is 5.63%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A May covered call on GM at strike $32.50 using 300 shares is offering an income potential of $216. In June, a strike 33.00 covered call offers $240 and in September, a strike 33.00 covered call offers $396 in premium.

The annualized return by writing covered calls in May is 26.94%, in June is 15.77% and in September is 10.40%.

Chart for GM

A May covered call on AMZN at strike $635.00 using 300 shares is offering an income potential of $8,940. In June, a strike 635.00 covered call offers $9,870 and in July, a strike 635.00 covered call offers $11,040 in premium.

The annualized return by writing covered calls in May is 58.17%, in June is 33.92% and in July is 25.90%.

Chart for AMZN


Financials Focus: Income Opportunities

A May covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $117. In June, a strike 15.00 covered call offers $135 and in July, a strike 15.00 covered call offers $210 in premium.

The annualized return by writing covered calls in May is 31.58%, in June is 19.23% and in July is 20.64%.

Chart for BAC

A May covered call on WFC at strike $50.50 using 300 shares is offering an income potential of $153. In June, a strike 52.50 covered call offers $114 and in July, a strike 52.50 covered call offers $204 in premium.

The annualized return by writing covered calls in May is 12.02%, in June is 4.70% and in July is 5.73%.

Chart for WFC


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $84.00 using 300 shares is offering an income potential of $495. In June, a strike 85.00 covered call offers $489 and in August, a strike 85.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 23.63%, in June is 12.26% and in August is 13.42%.

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 $537 in premium.

The annualized return by writing covered calls in May is 17.44%, in June is 4.37% and in August is 5.16%.

Chart for UTX


Materials Focus: Income Opportunities

A May covered call on CF at strike $35.00 using 300 shares is offering an income potential of $471. In June, a strike 35.00 covered call offers $441 and in August, a strike 35.00 covered call offers $855 in premium.

The annualized return by writing covered calls in May is 55.51%, in June is 27.23% and in August is 26.63%.

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 $1,200 in premium.

The annualized return by writing covered calls in May is 38.94%, in June is 22.30% and in July is 18.77%.

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 $285. In June, a strike 120.00 covered call offers $270 and in September, a strike 120.00 covered call offers $705 in premium.

The annualized return by writing covered calls in May is 9.76%, in June is 4.86% and in September is 5.05%.

Chart for NEE

An August covered call on AES at strike $12.00 using 300 shares is offering an income potential of $105.

The annualized return by writing covered calls in August is 9.59%.

Chart for AES


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 $360 in premium.

The annualized return by writing covered calls in May is 33.22%, in June is 19.45% and in July is 15.93%.

Chart for CTL

A May covered call on T at strike $39.00 using 300 shares is offering an income potential of $180. In June, a strike 39.00 covered call offers $219 and in July, a strike 39.00 covered call offers $246 in premium.

The annualized return by writing covered calls in May is 18.53%, in June is 11.89% and in July is 9.08%.

Chart for T

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

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