Income Alerts Newsletter for 04/28/2016

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 DIA options at strike $180.50 for May 21 2016 are offering a 0.98% return, which annualizes at a rate of 14.91%.

Chart for DIA

The SPY options at strike $209.50 for May 21 2016 are offering a 1.22% return, which annualizes at a rate of 18.53%.

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 $300. In June, a strike 55.00 covered call offers $159 and in July, a strike 55.00 covered call offers $246 in premium.

The annualized return by writing covered calls in May is 29.30%, in June is 7.10% and in July is 7.18%.

Chart for QCOM

A May covered call on BABA at strike $78.00 using 300 shares is offering an income potential of $804. In June, a strike 80.00 covered call offers $735 and in July, a strike 80.00 covered call offers $900 in premium.

The annualized return by writing covered calls in May is 54.37%, in June is 22.87% and in July is 18.34%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on CVX at strike $104.00 using 300 shares is offering an income potential of $591. In June, a strike 105.00 covered call offers $672 and in July, a strike 105.00 covered call offers $873 in premium.

The annualized return by writing covered calls in May is 29.41%, in June is 15.47% and in July is 13.15%.

Chart for CVX

A May covered call on EOG at strike $85.00 using 300 shares is offering an income potential of $792. In June, a strike 85.00 covered call offers $1,110 and in July, a strike 85.00 covered call offers $1,365 in premium.

The annualized return by writing covered calls in May is 49.04%, in June is 32.14% and in July is 25.96%.

Chart for EOG


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $76.50 using 300 shares is offering an income potential of $372. In June, a strike 77.50 covered call offers $513 and in July, a strike 77.50 covered call offers $666 in premium.

The annualized return by writing covered calls in May is 25.20%, in June is 16.14% and in July is 13.72%.

Chart for ESRX

A May covered call on GILD at strike $101.00 using 300 shares is offering an income potential of $804. In June, a strike 105.00 covered call offers $552 and in July, a strike 105.00 covered call offers $732 in premium.

The annualized return by writing covered calls in May is 41.57%, in June is 13.06% and in July is 11.33%.

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 $375. In June, a strike 160.00 covered call offers $780 and in July, a strike 160.00 covered call offers $1,320 in premium.

The annualized return by writing covered calls in May is 12.23%, in June is 11.85% and in July is 13.19%.

Chart for STZ

A May covered call on WBA at strike $82.00 using 300 shares is offering an income potential of $390. In June, a strike 82.50 covered call offers $543 and in July, a strike 82.50 covered call offers $870 in premium.

The annualized return by writing covered calls in May is 24.63%, in June is 15.93% and in July is 16.82%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A May covered call on CBS at strike $56.50 using 300 shares is offering an income potential of $462. In June, a strike 57.50 covered call offers $480 and in September, a strike 57.50 covered call offers $876 in premium.

The annualized return by writing covered calls in May is 42.70%, in June is 20.50% and in September is 13.94%.

Chart for CBS

A May covered call on CMCSA at strike $61.50 using 300 shares is offering an income potential of $300. In June, a strike 62.50 covered call offers $309 and in July, a strike 62.50 covered call offers $414 in premium.

The annualized return by writing covered calls in May is 25.22%, in June is 12.00% and in July is 10.51%.

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 $105.

The annualized return by writing covered calls in July is 10.89%.

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 $360 and in July, a strike 47.50 covered call offers $474 in premium.

The annualized return by writing covered calls in May is 30.87%, in June is 18.49% and in July is 15.96%.

Chart for MET


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $90.00 using 300 shares is offering an income potential of $468. In June, a strike 90.00 covered call offers $681 and in August, a strike 90.00 covered call offers $1,170 in premium.

The annualized return by writing covered calls in May is 27.08%, in June is 18.34% and in August is 14.52%.

Chart for UNP

A May covered call on HTZ at strike $10.00 using 300 shares is offering an income potential of $120. In June, a strike 10.00 covered call offers $180 and in September, a strike 10.00 covered call offers $360 in premium.

The annualized return by writing covered calls in May is 65.34%, in June is 46.23% and in September is 35.99%.

Chart for HTZ


Materials Focus: Income Opportunities

A May covered call on NEM at strike $32.50 using 300 shares is offering an income potential of $366. In June, a strike 33.00 covered call offers $516 and in July, a strike 33.00 covered call offers $657 in premium.

The annualized return by writing covered calls in May is 60.08%, in June is 39.74% and in July is 33.41%.

Chart for NEM

A May covered call on PPG at strike $115.00 using 300 shares is offering an income potential of $300. In June, a strike 115.00 covered call offers $570 and in August, a strike 115.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in May is 13.58%, in June is 12.01% and in August is 9.85%.

Chart for PPG


Utilities Focus: Income Opportunities

A May covered call on AEP at strike $65.00 using 300 shares is offering an income potential of $165. In June, a strike 65.00 covered call offers $270 and in August, a strike 65.00 covered call offers $495 in premium.

The annualized return by writing covered calls in May is 13.20%, in June is 10.02% and in August is 8.41%.

Chart for AEP

An August covered call on CNP at strike $22.00 using 300 shares is offering an income potential of $165.

The annualized return by writing covered calls in August is 8.36%.

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 $210. In June, a strike 32.00 covered call offers $270 and in July, a strike 32.00 covered call offers $330 in premium.

The annualized return by writing covered calls in May is 34.47%, in June is 20.59% and in July is 16.47%.

Chart for CTL

A May covered call on TMUS at strike $40.00 using 300 shares is offering an income potential of $255. In June, a strike 40.00 covered call offers $420 and in August, a strike 40.00 covered call offers $702 in premium.

The annualized return by writing covered calls in May is 33.27%, in June is 25.66% and in August is 19.88%.

Chart for TMUS

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

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.