Income Alerts Newsletter for 04/26/2016

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 $109.00 for May 21 2016 are offering a 1.69% return, which annualizes at a rate of 23.71%.

Chart for QQQ

The DIA options at strike $180.00 for May 21 2016 are offering a 0.99% return, which annualizes at a rate of 13.90%.

Chart for DIA

The SPY options at strike $209.00 for May 21 2016 are offering a 1.12% return, which annualizes at a rate of 15.72%.

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 $279. In June, a strike 52.50 covered call offers $384 and in July, a strike 52.50 covered call offers $516 in premium.

The annualized return by writing covered calls in May is 25.35%, in June is 16.91% and in July is 15.10%.

Chart for QCOM

A May covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $867. In June, a strike 80.00 covered call offers $900 and in July, a strike 80.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 53.42%, in June is 26.74% and in July is 21.30%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on SLB at strike $79.00 using 300 shares is offering an income potential of $522. In June, a strike 80.00 covered call offers $600 and in August, a strike 80.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in May is 31.71%, in June is 17.61% and in August is 14.07%.

Chart for SLB

A May covered call on APC at strike $51.50 using 300 shares is offering an income potential of $693. In June, a strike 52.50 covered call offers $831 and in August, a strike 52.50 covered call offers $1,215 in premium.

The annualized return by writing covered calls in May is 66.48%, in June is 38.75% and in August is 26.86%.

Chart for APC


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $74.00 using 300 shares is offering an income potential of $519. In June, a strike 75.00 covered call offers $591 and in July, a strike 75.00 covered call offers $735 in premium.

The annualized return by writing covered calls in May is 33.74%, in June is 18.56% and in July is 15.30%.

Chart for ESRX

A May covered call on PFE at strike $33.50 using 300 shares is offering an income potential of $108. In June, a strike 34.00 covered call offers $114 and in July, a strike 34.00 covered call offers $177 in premium.

The annualized return by writing covered calls in May is 15.38%, in June is 7.82% and in July is 8.05%.

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 $372. In June, a strike 105.00 covered call offers $240 and in July, a strike 105.00 covered call offers $372 in premium.

The annualized return by writing covered calls in May is 17.14%, in June is 5.30% and in July is 5.43%.

Chart for PEP

A May covered call on PM at strike $98.00 using 300 shares is offering an income potential of $333. In June, a strike 100.00 covered call offers $303 and in September, a strike 100.00 covered call offers $585 in premium.

The annualized return by writing covered calls in May is 16.16%, in June is 7.07% and in September is 5.14%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A May covered call on GM at strike $32.00 using 300 shares is offering an income potential of $216. In June, a strike 32.00 covered call offers $291 and in September, a strike 32.00 covered call offers $492 in premium.

The annualized return by writing covered calls in May is 32.37%, in June is 21.16% and in September is 13.62%.

Chart for GM

A May covered call on AMZN at strike $627.50 using 300 shares is offering an income potential of $8,265. In June, a strike 630.00 covered call offers $9,015 and in July, a strike 630.00 covered call offers $10,470 in premium.

The annualized return by writing covered calls in May is 64.61%, in June is 34.07% and in July is 26.27%.

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 $171 and in July, a strike 15.00 covered call offers $225 in premium.

The annualized return by writing covered calls in May is 37.58%, in June is 26.77% and in July is 23.49%.

Chart for BAC

A May covered call on WFC at strike $51.00 using 300 shares is offering an income potential of $144. In June, a strike 52.50 covered call offers $126 and in July, a strike 52.50 covered call offers $228 in premium.

The annualized return by writing covered calls in May is 13.47%, in June is 5.67% and in July is 6.80%.

Chart for WFC


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $88.00 using 300 shares is offering an income potential of $579. In June, a strike 90.00 covered call offers $492 and in August, a strike 90.00 covered call offers $930 in premium.

The annualized return by writing covered calls in May is 31.62%, in June is 12.89% and in August is 11.44%.

Chart for UNP

A May covered call on UTX at strike $106.00 using 300 shares is offering an income potential of $441. In June, a strike 110.00 covered call offers $213 and in August, a strike 110.00 covered call offers $507 in premium.

The annualized return by writing covered calls in May is 19.89%, in June is 4.59% and in August is 5.09%.

Chart for UTX


Materials Focus: Income Opportunities

A May covered call on CF at strike $33.50 using 300 shares is offering an income potential of $423. In June, a strike 35.00 covered call offers $381 and in August, a strike 35.00 covered call offers $618 in premium.

The annualized return by writing covered calls in May is 62.32%, in June is 26.91% and in August is 20.66%.

Chart for CF

A May covered call on MON at strike $94.50 using 300 shares is offering an income potential of $762. In June, a strike 95.00 covered call offers $1,035 and in July, a strike 95.00 covered call offers $1,305 in premium.

The annualized return by writing covered calls in May is 38.95%, in June is 25.73% and in July is 21.58%.

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 $75.

The annualized return by writing covered calls in August is 7.26%.

Chart for AES

An August covered call on CNP at strike $22.00 using 300 shares is offering an income potential of $135.

The annualized return by writing covered calls in August is 6.81%.

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 $195. In June, a strike 33.00 covered call offers $120 and in July, a strike 32.00 covered call offers $285 in premium.

The annualized return by writing covered calls in May is 29.89%, in June is 8.78% and in July is 13.99%.

Chart for CTL

A May covered call on T at strike $38.50 using 300 shares is offering an income potential of $159. In June, a strike 39.00 covered call offers $150 and in July, a strike 39.00 covered call offers $177 in premium.

The annualized return by writing covered calls in May is 19.75%, in June is 8.96% and in July is 6.98%.

Chart for T

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

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