Income Alerts Newsletter for 04/22/2016

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 20.18%.

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 18.11%.

Chart for DIA

The SPY options at strike $209.00 for May 13 2016 are offering a 1.40% return, which annualizes at a rate of 23.27%.

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 $468. In June, a strike 52.50 covered call offers $297 and in July, a strike 52.50 covered call offers $396 in premium.

The annualized return by writing covered calls in May is 37.88%, in June is 12.29% and in July is 11.13%.

Chart for QCOM

A May covered call on BABA at strike $81.00 using 300 shares is offering an income potential of $723. In June, a strike 82.50 covered call offers $732 and in July, a strike 82.50 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 37.41%, in June is 19.60% and in July is 19.80%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on SLB at strike $80.50 using 300 shares is offering an income potential of $507. In June, a strike 82.50 covered call offers $423 and in August, a strike 82.50 covered call offers $915 in premium.

The annualized return by writing covered calls in May is 26.17%, in June is 11.25% and in August is 11.91%.

Chart for SLB

A May covered call on APC at strike $50.50 using 300 shares is offering an income potential of $807. In June, a strike 52.50 covered call offers $786 and in August, a strike 52.50 covered call offers $1,095 in premium.

The annualized return by writing covered calls in May is 69.13%, in June is 34.78% and in August is 23.74%.

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 $558 and in July, a strike 75.00 covered call offers $582 in premium.

The annualized return by writing covered calls in May is 26.27%, in June is 16.38% and in July is 11.53%.

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 $117 and in July, a strike 34.00 covered call offers $159 in premium.

The annualized return by writing covered calls in May is 9.96%, in June is 7.47% and in July is 6.88%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A May covered call on PM at strike $96.50 using 300 shares is offering an income potential of $489. In June, a strike 97.50 covered call offers $519 and in September, a strike 97.50 covered call offers $828 in premium.

The annualized return by writing covered calls in May is 20.92%, in June is 11.50% and in September is 7.22%.

Chart for PM

A May covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $345. In June, a strike 160.00 covered call offers $960 and in July, a strike 160.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in May is 9.08%, in June is 13.25% and in July is 11.23%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A May covered call on GM at strike $33.00 using 300 shares is offering an income potential of $189. In June, a strike 33.00 covered call offers $258 and in September, a strike 33.00 covered call offers $441 in premium.

The annualized return by writing covered calls in May is 23.93%, in June is 17.02% and in September is 11.55%.

Chart for GM

A May covered call on AMZN at strike $632.50 using 300 shares is offering an income potential of $8,130. In June, a strike 635.00 covered call offers $9,540 and in July, a strike 635.00 covered call offers $10,680 in premium.

The annualized return by writing covered calls in May is 54.60%, in June is 33.40% and in July is 25.38%.

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 $120. In June, a strike 15.00 covered call offers $162 and in July, a strike 15.00 covered call offers $216 in premium.

The annualized return by writing covered calls in May is 33.56%, in June is 23.66% and in July is 21.55%.

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 $192 in premium.

The annualized return by writing covered calls in May is 12.53%, in June is 4.81% and in July is 5.50%.

Chart for WFC


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $87.50 using 300 shares is offering an income potential of $636. In June, a strike 87.50 covered call offers $267 and in August, a strike 87.50 covered call offers $1,260 in premium.

The annualized return by writing covered calls in May is 30.27%, in June is 6.48% and in August is 15.24%.

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 $525 in premium.

The annualized return by writing covered calls in May is 18.04%, in June is 4.45% and in August is 5.09%.

Chart for UTX


Materials Focus: Income Opportunities

A May covered call on CF at strike $34.50 using 300 shares is offering an income potential of $582. In June, a strike 35.00 covered call offers $441 and in August, a strike 35.00 covered call offers $762 in premium.

The annualized return by writing covered calls in May is 73.08%, in June is 28.23% and in August is 24.17%.

Chart for CF

A May covered call on MON at strike $94.50 using 300 shares is offering an income potential of $768. In June, a strike 95.00 covered call offers $975 and in July, a strike 95.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in May is 34.02%, in June is 22.51% and in July is 19.83%.

Chart for MON


Utilities Focus: Income Opportunities

An August covered call on AES at strike $12.00 using 300 shares is offering an income potential of $90.

The annualized return by writing covered calls in August is 8.37%.

Chart for AES

A May covered call on CNP at strike $21.00 using 300 shares is offering an income potential of $90. In June, a strike 21.00 covered call offers $165 and in August, a strike 21.00 covered call offers $195 in premium.

The annualized return by writing covered calls in May is 18.02%, in June is 17.31% and in August is 9.85%.

Chart for CNP


Telecommunications Focus: Income Opportunities

A May covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $225. In June, a strike 33.00 covered call offers $300 and in July, a strike 32.00 covered call offers $315 in premium.

The annualized return by writing covered calls in May is 29.78%, in June is 20.71% and in July is 14.69%.

Chart for CTL

A May covered call on T at strike $38.00 using 300 shares is offering an income potential of $198. In June, a strike 38.00 covered call offers $252 and in July, a strike 38.00 covered call offers $297 in premium.

The annualized return by writing covered calls in May is 21.59%, in June is 14.28% and in July is 11.40%.

Chart for T

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

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