Income Alerts Newsletter for 05/05/2016

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 $176.50 for May 27 2016 are offering a 1.20% return, which annualizes at a rate of 19.04%.

Chart for DIA

The SPY options at strike $205.50 for May 27 2016 are offering a 1.36% return, which annualizes at a rate of 21.58%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on FB at strike $119.00 using 300 shares is offering an income potential of $582. In June, a strike 120.00 covered call offers $930 and in July, a strike 120.00 covered call offers $1,305 in premium.

The annualized return by writing covered calls in May is 35.87%, in June is 21.87% and in July is 19.13%.

Chart for FB

A May covered call on MA at strike $96.50 using 300 shares is offering an income potential of $423. In June, a strike 97.50 covered call offers $573 and in July, a strike 97.50 covered call offers $810 in premium.

The annualized return by writing covered calls in May is 31.92%, in June is 16.42% and in July is 14.43%.

Chart for MA


Energy Focus: Income Opportunities

A May covered call on HAL at strike $40.00 using 300 shares is offering an income potential of $315. In June, a strike 40.00 covered call offers $516 and in July, a strike 40.00 covered call offers $651 in premium.

The annualized return by writing covered calls in May is 58.09%, in June is 36.58% and in July is 28.79%.

Chart for HAL

A May covered call on HES at strike $55.50 using 300 shares is offering an income potential of $570. In June, a strike 57.50 covered call offers $1,275 and in July, a strike 57.50 covered call offers $885 in premium.

The annualized return by writing covered calls in May is 76.36%, in June is 67.50% and in July is 28.16%.

Chart for HES


Healthcare Focus: Income Opportunities

A May covered call on MRK at strike $55.00 using 300 shares is offering an income potential of $273. In June, a strike 55.00 covered call offers $402 and in July, a strike 55.00 covered call offers $498 in premium.

The annualized return by writing covered calls in May is 36.25%, in June is 20.33% and in July is 15.62%.

Chart for MRK

A May covered call on PFE at strike $33.50 using 300 shares is offering an income potential of $96. In June, a strike 34.00 covered call offers $120 and in July, a strike 34.00 covered call offers $183 in premium.

The annualized return by writing covered calls in May is 20.77%, in June is 9.83% and in July is 9.30%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A May covered call on KO at strike $45.00 using 300 shares is offering an income potential of $156. In June, a strike 45.00 covered call offers $246 and in July, a strike 45.00 covered call offers $318 in premium.

The annualized return by writing covered calls in May is 25.11%, in June is 15.06% and in July is 12.07%.

Chart for KO

A May covered call on ADM at strike $39.00 using 300 shares is offering an income potential of $186. In June, a strike 39.00 covered call offers $309 and in July, a strike 39.00 covered call offers $420 in premium.

The annualized return by writing covered calls in May is 34.94%, in June is 22.17% and in July is 18.76%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A May covered call on DG at strike $84.50 using 300 shares is offering an income potential of $210. In June, a strike 85.00 covered call offers $660 and in August, a strike 85.00 covered call offers $990 in premium.

The annualized return by writing covered calls in May is 18.04%, in June is 21.81% and in August is 13.82%.

Chart for DG

A May covered call on FOXA at strike $30.00 using 300 shares is offering an income potential of $210. In June, a strike 30.00 covered call offers $285 and in July, a strike 30.00 covered call offers $435 in premium.

The annualized return by writing covered calls in May is 51.65%, in June is 26.71% and in July is 25.57%.

Chart for FOXA


Financials Focus: Income Opportunities

A July covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $114.

The annualized return by writing covered calls in July is 13.82%.

Chart for BAC

A May covered call on MS at strike $26.50 using 300 shares is offering an income potential of $168. In June, a strike 27.00 covered call offers $225 and in July, a strike 27.00 covered call offers $315 in premium.

The annualized return by writing covered calls in May is 46.75%, in June is 23.83% and in July is 20.81%.

Chart for MS


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $86.00 using 300 shares is offering an income potential of $516. In June, a strike 87.50 covered call offers $540 and in August, a strike 87.50 covered call offers $1,035 in premium.

The annualized return by writing covered calls in May is 44.01%, in June is 17.41% and in August is 14.19%.

Chart for UNP

A May covered call on UTX at strike $101.00 using 300 shares is offering an income potential of $393. In June, a strike 105.00 covered call offers $186 and in August, a strike 105.00 covered call offers $525 in premium.

The annualized return by writing covered calls in May is 28.31%, in June is 5.03% and in August is 5.98%.

Chart for UTX


Materials Focus: Income Opportunities

A May covered call on DOW at strike $51.50 using 300 shares is offering an income potential of $267. In June, a strike 52.50 covered call offers $327 and in September, a strike 52.50 covered call offers $627 in premium.

The annualized return by writing covered calls in May is 37.84%, in June is 17.58% and in September is 11.38%.

Chart for DOW

A May covered call on FCX at strike $12.00 using 300 shares is offering an income potential of $213. In June, a strike 12.00 covered call offers $366 and in July, a strike 12.00 covered call offers $456 in premium.

The annualized return by writing covered calls in May is 137.46%, in June is 93.53% and in July is 73.93%.

Chart for FCX


Utilities Focus: Income Opportunities

A June covered call on D at strike $75.00 using 300 shares is offering an income potential of $150. In July, a strike 75.00 covered call offers $255 in premium.

The annualized return by writing covered calls in June is 5.61% and in July is 5.91%.

Chart for D

A June covered call on DUK at strike $82.50 using 300 shares is offering an income potential of $150. In July, a strike 82.50 covered call offers $255 in premium.

The annualized return by writing covered calls in June is 5.10% and in July is 5.37%.

Chart for DUK


Telecommunications Focus: Income Opportunities

A May covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $315. In June, a strike 31.00 covered call offers $315 and in July, a strike 31.00 covered call offers $405 in premium.

The annualized return by writing covered calls in May is 75.37%, in June is 28.47% and in July is 22.80%.

Chart for CTL

A May covered call on T at strike $39.00 using 300 shares is offering an income potential of $117. In June, a strike 39.00 covered call offers $210 and in July, a strike 39.00 covered call offers $255 in premium.

The annualized return by writing covered calls in May is 21.76%, in June is 14.87% and in July is 11.18%.

Chart for T

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

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