Income Alerts Newsletter for 05/03/2016

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 $179.00 for May 27 2016 are offering a 1.04% return, which annualizes at a rate of 15.19%.

Chart for DIA

The SPY options at strike $208.00 for May 27 2016 are offering a 1.31% return, which annualizes at a rate of 19.13%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on QCOM at strike $51.50 using 300 shares is offering an income potential of $243. In June, a strike 52.50 covered call offers $234 and in July, a strike 52.50 covered call offers $345 in premium.

The annualized return by writing covered calls in May is 30.94%, in June is 12.04% and in July is 11.20%.

Chart for QCOM

A May covered call on BABA at strike $77.00 using 300 shares is offering an income potential of $777. In June, a strike 77.50 covered call offers $915 and in July, a strike 77.50 covered call offers $1,095 in premium.

The annualized return by writing covered calls in May is 67.22%, in June is 32.20% and in July is 24.35%.

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 $411. In June, a strike 105.00 covered call offers $552 and in July, a strike 105.00 covered call offers $792 in premium.

The annualized return by writing covered calls in May is 25.82%, in June is 14.08% and in July is 12.76%.

Chart for CVX

A May covered call on EOG at strike $83.00 using 300 shares is offering an income potential of $780. In June, a strike 85.00 covered call offers $858 and in July, a strike 85.00 covered call offers $1,095 in premium.

The annualized return by writing covered calls in May is 62.29%, in June is 27.79% and in July is 22.45%.

Chart for EOG


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $74.00 using 300 shares is offering an income potential of $408. In June, a strike 75.00 covered call offers $507 and in July, a strike 75.00 covered call offers $702 in premium.

The annualized return by writing covered calls in May is 36.16%, in June is 18.25% and in July is 15.98%.

Chart for ESRX

A May covered call on HCA at strike $81.50 using 300 shares is offering an income potential of $660. In June, a strike 82.50 covered call offers $615 and in September, a strike 82.50 covered call offers $1,260 in premium.

The annualized return by writing covered calls in May is 53.49%, in June is 20.11% and in September is 14.43%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A May covered call on KO at strike $45.00 using 300 shares is offering an income potential of $159. In June, a strike 45.00 covered call offers $243 and in July, a strike 45.00 covered call offers $300 in premium.

The annualized return by writing covered calls in May is 22.91%, in June is 14.24% and in July is 11.07%.

Chart for KO

A May covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $450. In June, a strike 160.00 covered call offers $870 and in July, a strike 160.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in May is 18.44%, in June is 14.54% and in July is 15.27%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A May covered call on CBS at strike $56.50 using 300 shares is offering an income potential of $453. In June, a strike 57.50 covered call offers $462 and in September, a strike 57.50 covered call offers $807 in premium.

The annualized return by writing covered calls in May is 52.78%, in June is 21.77% and in September is 13.23%.

Chart for CBS

A May covered call on CMCSA at strike $61.50 using 300 shares is offering an income potential of $285. In June, a strike 62.50 covered call offers $300 and in July, a strike 62.50 covered call offers $420 in premium.

The annualized return by writing covered calls in May is 30.28%, in June is 12.89% and in July is 11.39%.

Chart for CMCSA


Financials Focus: Income Opportunities

A June covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $126. In July, a strike 15.00 covered call offers $186 in premium.

The annualized return by writing covered calls in June is 22.73% and in July is 21.32%.

Chart for BAC

A May covered call on MET at strike $46.00 using 300 shares is offering an income potential of $273. In June, a strike 47.50 covered call offers $255 and in July, a strike 47.50 covered call offers $360 in premium.

The annualized return by writing covered calls in May is 38.91%, in June is 14.67% and in July is 13.08%.

Chart for MET


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $88.50 using 300 shares is offering an income potential of $519. In June, a strike 90.00 covered call offers $537 and in August, a strike 90.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in May is 38.47%, in June is 16.10% and in August is 13.11%.

Chart for UNP

A May covered call on UTX at strike $105.00 using 300 shares is offering an income potential of $330. In June, a strike 105.00 covered call offers $549 and in August, a strike 105.00 covered call offers $960 in premium.

The annualized return by writing covered calls in May is 20.46%, in June is 13.86% and in August is 10.50%.

Chart for UTX


Materials Focus: Income Opportunities

A May covered call on NEM at strike $34.50 using 300 shares is offering an income potential of $426. In June, a strike 35.00 covered call offers $570 and in July, a strike 35.00 covered call offers $786 in premium.

The annualized return by writing covered calls in May is 82.86%, in June is 45.48% and in July is 40.20%.

Chart for NEM

A May covered call on PPG at strike $115.00 using 300 shares is offering an income potential of $120. In June, a strike 115.00 covered call offers $375 and in August, a strike 115.00 covered call offers $810 in premium.

The annualized return by writing covered calls in May is 6.93%, in June is 8.83% and in August is 8.25%.

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 $105. In June, a strike 65.00 covered call offers $285 and in August, a strike 65.00 covered call offers $510 in premium.

The annualized return by writing covered calls in May is 10.50%, in June is 11.63% and in August is 9.00%.

Chart for AEP

A May covered call on CNP at strike $22.00 using 300 shares is offering an income potential of $75. In June, a strike 22.00 covered call offers $105 and in August, a strike 22.00 covered call offers $165 in premium.

The annualized return by writing covered calls in May is 22.39%, in June is 12.73% and in August is 8.63%.

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 $255. In June, a strike 32.00 covered call offers $285 and in July, a strike 32.00 covered call offers $330 in premium.

The annualized return by writing covered calls in May is 53.31%, in June is 24.17% and in July is 17.62%.

Chart for CTL

A May covered call on TMUS at strike $40.00 using 300 shares is offering an income potential of $285. In June, a strike 40.00 covered call offers $444 and in August, a strike 40.00 covered call offers $699 in premium.

The annualized return by writing covered calls in May is 46.75%, in June is 29.85% and in August is 20.53%.

Chart for TMUS

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

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