Income Alerts Newsletter for 04/27/2016

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 $108.50 for May 21 2016 are offering a 1.68% return, which annualizes at a rate of 24.50%.

Chart for QQQ

The DIA options at strike $180.00 for May 21 2016 are offering a 1.05% return, which annualizes at a rate of 15.28%.

Chart for DIA

The SPY options at strike $209.00 for May 21 2016 are offering a 1.34% return, which annualizes at a rate of 19.55%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on QCOM at strike $53.00 using 300 shares is offering an income potential of $288. In June, a strike 55.00 covered call offers $156 and in July, a strike 55.00 covered call offers $252 in premium.

The annualized return by writing covered calls in May is 26.98%, in June is 6.84% and in July is 7.27%.

Chart for QCOM

A May covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $777. In June, a strike 80.00 covered call offers $855 and in July, a strike 80.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in May is 49.74%, in June is 25.91% and in July is 20.37%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on CVX at strike $103.00 using 300 shares is offering an income potential of $531. In June, a strike 105.00 covered call offers $489 and in July, a strike 105.00 covered call offers $699 in premium.

The annualized return by writing covered calls in May is 25.71%, in June is 11.15% and in July is 10.50%.

Chart for CVX

A May covered call on EOG at strike $83.00 using 300 shares is offering an income potential of $468. In June, a strike 85.00 covered call offers $759 and in July, a strike 85.00 covered call offers $990 in premium.

The annualized return by writing covered calls in May is 28.04%, in June is 21.71% and in July is 18.71%.

Chart for EOG


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $74.50 using 300 shares is offering an income potential of $417. In June, a strike 75.00 covered call offers $576 and in July, a strike 75.00 covered call offers $747 in premium.

The annualized return by writing covered calls in May is 27.85%, in June is 18.28% and in July is 15.63%.

Chart for ESRX

A May covered call on GILD at strike $102.00 using 300 shares is offering an income potential of $753. In June, a strike 105.00 covered call offers $627 and in July, a strike 105.00 covered call offers $822 in premium.

The annualized return by writing covered calls in May is 37.08%, in June is 14.50% and in July is 12.52%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A May covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $360. In June, a strike 160.00 covered call offers $810 and in July, a strike 160.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in May is 11.30%, in June is 12.11% and in July is 12.75%.

Chart for STZ

A May covered call on ADM at strike $40.00 using 300 shares is offering an income potential of $288. In June, a strike 40.00 covered call offers $333 and in September, a strike 40.00 covered call offers $642 in premium.

The annualized return by writing covered calls in May is 36.15%, in June is 19.79% and in September is 14.43%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A May covered call on CBS at strike $56.50 using 300 shares is offering an income potential of $465. In June, a strike 57.50 covered call offers $465 and in September, a strike 57.50 covered call offers $858 in premium.

The annualized return by writing covered calls in May is 41.23%, in June is 19.45% and in September is 13.53%.

Chart for CBS

A May covered call on CMCSA at strike $61.50 using 300 shares is offering an income potential of $351. In June, a strike 62.50 covered call offers $342 and in July, a strike 62.50 covered call offers $447 in premium.

The annualized return by writing covered calls in May is 28.53%, in June is 13.10% and in July is 11.27%.

Chart for CMCSA


Financials Focus: Income Opportunities

A July covered call on BAC at strike $16.00 using 300 shares is offering an income potential of $114.

The annualized return by writing covered calls in July is 11.64%.

Chart for BAC

A May covered call on MET at strike $47.00 using 300 shares is offering an income potential of $279. In June, a strike 47.50 covered call offers $363 and in July, a strike 47.50 covered call offers $474 in premium.

The annualized return by writing covered calls in May is 29.65%, in June is 18.31% and in July is 15.77%.

Chart for MET


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $89.00 using 300 shares is offering an income potential of $426. In June, a strike 90.00 covered call offers $549 and in August, a strike 90.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 23.74%, in June is 14.50% and in August is 13.30%.

Chart for UNP

A May covered call on HTZ at strike $9.50 using 300 shares is offering an income potential of $150. In June, a strike 10.00 covered call offers $165 and in September, a strike 10.00 covered call offers $240 in premium.

The annualized return by writing covered calls in May is 81.66%, in June is 42.61% and in September is 23.47%.

Chart for HTZ


Materials Focus: Income Opportunities

A May covered call on NEM at strike $32.00 using 300 shares is offering an income potential of $429. In June, a strike 32.00 covered call offers $594 and in July, a strike 32.00 covered call offers $762 in premium.

The annualized return by writing covered calls in May is 68.36%, in June is 45.47% and in July is 38.89%.

Chart for NEM

A May covered call on PPG at strike $115.00 using 300 shares is offering an income potential of $360. In June, a strike 115.00 covered call offers $645 and in August, a strike 115.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 15.59%, in June is 13.29% and in August is 10.30%.

Chart for PPG


Utilities Focus: Income Opportunities

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 6.86%.

Chart for CNP

A May covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $105. In June, a strike 120.00 covered call offers $225 and in September, a strike 120.00 covered call offers $465 in premium.

The annualized return by writing covered calls in May is 4.44%, in June is 4.50% and in September is 3.45%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A May covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $210. In June, a strike 32.00 covered call offers $255 and in July, a strike 32.00 covered call offers $315 in premium.

The annualized return by writing covered calls in May is 33.27%, in June is 19.15% and in July is 15.58%.

Chart for CTL

A May covered call on TMUS at strike $39.50 using 300 shares is offering an income potential of $693. In June, a strike 40.00 covered call offers $411 and in August, a strike 40.00 covered call offers $642 in premium.

The annualized return by writing covered calls in May is 91.10%, in June is 24.85% and in August is 18.11%.

Chart for TMUS

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

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