Income Alerts Newsletter for 04/29/2016

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 $178.50 for May 21 2016 are offering a 1.08% return, which annualizes at a rate of 17.10%.

Chart for DIA

The SPY options at strike $207.50 for May 21 2016 are offering a 1.39% return, which annualizes at a rate of 22.03%.

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 $255. In June, a strike 52.50 covered call offers $363 and in July, a strike 52.50 covered call offers $474 in premium.

The annualized return by writing covered calls in May is 26.30%, in June is 17.01% and in July is 14.44%.

Chart for QCOM

A May covered call on BABA at strike $76.50 using 300 shares is offering an income potential of $915. In June, a strike 77.50 covered call offers $960 and in July, a strike 77.50 covered call offers $1,065 in premium.

The annualized return by writing covered calls in May is 65.99%, in June is 31.29% and in July is 22.51%.

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 $504. In June, a strike 105.00 covered call offers $492 and in July, a strike 105.00 covered call offers $687 in premium.

The annualized return by writing covered calls in May is 26.47%, in June is 11.65% and in July is 10.57%.

Chart for CVX

A May covered call on EOG at strike $82.00 using 300 shares is offering an income potential of $870. In June, a strike 82.50 covered call offers $1,080 and in July, a strike 82.50 covered call offers $1,350 in premium.

The annualized return by writing covered calls in May is 58.26%, in June is 32.91% and in July is 26.87%.

Chart for EOG


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $75.00 using 300 shares is offering an income potential of $471. In June, a strike 75.00 covered call offers $723 and in July, a strike 75.00 covered call offers $894 in premium.

The annualized return by writing covered calls in May is 33.96%, in June is 23.78% and in July is 19.14%.

Chart for ESRX

A May covered call on GILD at strike $97.50 using 300 shares is offering an income potential of $1,365. In June, a strike 97.50 covered call offers $1,065 and in July, a strike 97.50 covered call offers $1,215 in premium.

The annualized return by writing covered calls in May is 78.10%, in June is 27.19% and in July is 20.13%.

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 $270. In June, a strike 160.00 covered call offers $705 and in July, a strike 160.00 covered call offers $1,170 in premium.

The annualized return by writing covered calls in May is 9.23%, in June is 10.98% and in July is 11.88%.

Chart for STZ

A May covered call on ADM at strike $40.50 using 300 shares is offering an income potential of $261. In June, a strike 41.00 covered call offers $315 and in July, a strike 41.00 covered call offers $387 in premium.

The annualized return by writing covered calls in May is 35.22%, in June is 19.26% and in July is 15.37%.

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 $408. In June, a strike 57.50 covered call offers $456 and in September, a strike 57.50 covered call offers $816 in premium.

The annualized return by writing covered calls in May is 39.45%, in June is 19.94% and in September is 13.11%.

Chart for CBS

A May covered call on CMCSA at strike $61.50 using 300 shares is offering an income potential of $273. In June, a strike 62.50 covered call offers $309 and in July, a strike 62.50 covered call offers $408 in premium.

The annualized return by writing covered calls in May is 23.97%, in June is 12.26% and in July is 10.51%.

Chart for CMCSA


Financials Focus: Income Opportunities

A May covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $84. In June, a strike 15.00 covered call offers $138 and in July, a strike 15.00 covered call offers $195 in premium.

The annualized return by writing covered calls in May is 30.62%, in June is 22.97% and in July is 21.24%.

Chart for BAC

A May covered call on MET at strike $46.00 using 300 shares is offering an income potential of $282. In June, a strike 47.50 covered call offers $249 and in July, a strike 47.50 covered call offers $408 in premium.

The annualized return by writing covered calls in May is 33.31%, in June is 13.23% and in July is 14.16%.

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 $489. In June, a strike 90.00 covered call offers $561 and in August, a strike 90.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in May is 29.77%, in June is 15.45% and in August is 14.56%.

Chart for UNP

A May covered call on HTZ at strike $9.50 using 300 shares is offering an income potential of $180. In June, a strike 10.00 covered call offers $150 and in September, a strike 10.00 covered call offers $315 in premium.

The annualized return by writing covered calls in May is 109.07%, in June is 40.53% and in September is 32.60%.

Chart for HTZ


Materials Focus: Income Opportunities

A May covered call on NEM at strike $33.00 using 300 shares is offering an income potential of $417. In June, a strike 33.00 covered call offers $624 and in July, a strike 33.00 covered call offers $789 in premium.

The annualized return by writing covered calls in May is 69.81%, in June is 48.16% and in July is 40.02%.

Chart for NEM

A May covered call on PPG at strike $115.00 using 300 shares is offering an income potential of $270. In June, a strike 115.00 covered call offers $600 and in August, a strike 115.00 covered call offers $990 in premium.

The annualized return by writing covered calls in May is 12.77%, in June is 12.92% and in August is 9.65%.

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 $165.

The annualized return by writing covered calls in August is 8.46%.

Chart for CNP

A May covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $120. In June, a strike 80.00 covered call offers $225 and in July, a strike 80.00 covered call offers $345 in premium.

The annualized return by writing covered calls in May is 8.14%, in June is 6.92% and in July is 6.88%.

Chart for DUK


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 $300 in premium.

The annualized return by writing covered calls in May is 36.23%, in June is 19.94% and in July is 15.22%.

Chart for CTL

A May covered call on TMUS at strike $40.00 using 300 shares is offering an income potential of $273. In June, a strike 40.00 covered call offers $429 and in August, a strike 40.00 covered call offers $705 in premium.

The annualized return by writing covered calls in May is 37.17%, in June is 26.70% and in August is 20.11%.

Chart for TMUS

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

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