Income Alerts Newsletter for 05/03/2017

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 $137.50 for May 26 2017 are offering a 0.98% return, which annualizes at a rate of 14.86%.

Chart for QQQ

The DIA options at strike $210.00 for May 26 2017 are offering a 0.50% return, which annualizes at a rate of 7.67%.

Chart for DIA

The SPY options at strike $239.00 for May 26 2017 are offering a 0.81% return, which annualizes at a rate of 12.26%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on BABA at strike $119.00 using 300 shares is offering an income potential of $780. In June, a strike 120.00 covered call offers $1,020 and in July, a strike 120.00 covered call offers $1,335 in premium.

The annualized return by writing covered calls in May is 45.65%, in June is 23.52% and in July is 17.65%.

Chart for BABA

A May covered call on FB at strike $155.00 using 300 shares is offering an income potential of $876. In June, a strike 155.00 covered call offers $1,140 and in July, a strike 155.00 covered call offers $1,500 in premium.

The annualized return by writing covered calls in May is 39.51%, in June is 20.24% and in July is 15.25%.

Chart for FB


Healthcare Focus: Income Opportunities

A May covered call on GILD at strike $69.00 using 300 shares is offering an income potential of $543. In June, a strike 70.00 covered call offers $474 and in July, a strike 70.00 covered call offers $681 in premium.

The annualized return by writing covered calls in May is 54.96%, in June is 18.71% and in July is 15.42%.

Chart for GILD

A May covered call on JNJ at strike $124.00 using 300 shares is offering an income potential of $267. In June, a strike 125.00 covered call offers $291 and in July, a strike 125.00 covered call offers $552 in premium.

The annualized return by writing covered calls in May is 14.70%, in June is 6.27% and in July is 6.80%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

A May covered call on PEP at strike $113.00 using 300 shares is offering an income potential of $228. In June, a strike 115.00 covered call offers $180 and in July, a strike 115.00 covered call offers $381 in premium.

The annualized return by writing covered calls in May is 13.82%, in June is 4.26% and in July is 5.15%.

Chart for PEP

A May covered call on PM at strike $111.00 using 300 shares is offering an income potential of $288. In June, a strike 115.00 covered call offers $168 and in September, a strike 115.00 covered call offers $573 in premium.

The annualized return by writing covered calls in May is 17.78%, in June is 4.04% and in September is 4.69%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A May covered call on DG at strike $74.00 using 300 shares is offering an income potential of $225. In June, a strike 75.00 covered call offers $585 and in August, a strike 75.00 covered call offers $795 in premium.

The annualized return by writing covered calls in May is 20.83%, in June is 21.54% and in August is 12.48%.

Chart for DG

A May covered call on CMCSA at strike $39.50 using 300 shares is offering an income potential of $129. In June, a strike 40.00 covered call offers $186 and in July, a strike 40.00 covered call offers $273 in premium.

The annualized return by writing covered calls in May is 22.41%, in June is 12.71% and in July is 10.67%.

Chart for CMCSA


Financials Focus: Income Opportunities

A June covered call on BAC at strike $24.00 using 300 shares is offering an income potential of $147. In July, a strike 24.00 covered call offers $243 in premium.

The annualized return by writing covered calls in June is 16.88% and in July is 16.07%.

Chart for BAC

A May covered call on MS at strike $43.50 using 300 shares is offering an income potential of $207. In June, a strike 44.00 covered call offers $312 and in July, a strike 44.00 covered call offers $483 in premium.

The annualized return by writing covered calls in May is 32.80%, in June is 19.50% and in July is 17.38%.

Chart for MS


Industrials Focus: Income Opportunities

A May covered call on UPS at strike $107.00 using 300 shares is offering an income potential of $273. In June, a strike 110.00 covered call offers $174 and in July, a strike 110.00 covered call offers $369 in premium.

The annualized return by writing covered calls in May is 17.41%, in June is 4.33% and in July is 5.24%.

Chart for UPS

A May covered call on UTX at strike $120.00 using 300 shares is offering an income potential of $210. In June, a strike 120.00 covered call offers $426 and in August, a strike 120.00 covered call offers $885 in premium.

The annualized return by writing covered calls in May is 11.97%, in June is 9.56% and in August is 8.49%.

Chart for UTX


Materials Focus: Income Opportunities

A July covered call on MON at strike $120.00 using 300 shares is offering an income potential of $240. In October, a strike 120.00 covered call offers $615 in premium.

The annualized return by writing covered calls in July is 3.11% and in October is 3.79%.

Chart for MON

A May covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $285. In June, a strike 110.00 covered call offers $570 and in August, a strike 110.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 17.75%, in June is 14.02% and in August is 11.39%.

Chart for PPG


Utilities Focus: Income Opportunities

A May covered call on ED at strike $80.00 using 300 shares is offering an income potential of $135. In June, a strike 80.00 covered call offers $240 and in August, a strike 80.00 covered call offers $600 in premium.

The annualized return by writing covered calls in May is 11.58%, in June is 8.09% and in August is 6.46%.

Chart for ED

A May covered call on NEE at strike $135.00 using 300 shares is offering an income potential of $255. In June, a strike 135.00 covered call offers $435 and in September, a strike 135.00 covered call offers $960 in premium.

The annualized return by writing covered calls in May is 12.94%, in June is 8.68% and in September is 6.52%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A May covered call on SBAC at strike $130.00 using 300 shares is offering an income potential of $465. In June, a strike 130.00 covered call offers $795 and in September, a strike 130.00 covered call offers $1,530 in premium.

The annualized return by writing covered calls in May is 24.66%, in June is 16.64% and in September is 10.97%.

Chart for SBAC

A May covered call on TMUS at strike $67.00 using 300 shares is offering an income potential of $504. In June, a strike 67.50 covered call offers $744 and in July, a strike 67.50 covered call offers $990 in premium.

The annualized return by writing covered calls in May is 52.20%, in June is 30.53% and in July is 23.37%.

Chart for TMUS

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

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