Income Alerts Newsletter for 05/10/2016

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 $177.00 for June 3 2016 are offering a 1.17% return, which annualizes at a rate of 17.11%.

Chart for DIA

The SPY options at strike $206.00 for June 3 2016 are offering a 1.40% return, which annualizes at a rate of 20.42%.

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 $183. In June, a strike 52.50 covered call offers $198 and in July, a strike 52.50 covered call offers $345 in premium.

The annualized return by writing covered calls in May is 36.68%, in June is 11.92% and in July is 12.33%.

Chart for QCOM

A May covered call on BABA at strike $79.50 using 300 shares is offering an income potential of $426. In June, a strike 80.00 covered call offers $759 and in July, a strike 80.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in May is 55.38%, in June is 30.03% and in July is 23.64%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on HAL at strike $39.00 using 300 shares is offering an income potential of $225. In June, a strike 39.00 covered call offers $432 and in July, a strike 39.00 covered call offers $573 in premium.

The annualized return by writing covered calls in May is 60.13%, in June is 35.28% and in July is 27.87%.

Chart for HAL

A May covered call on HES at strike $54.50 using 300 shares is offering an income potential of $480. In June, a strike 55.00 covered call offers $798 and in July, a strike 55.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in May is 92.05%, in June is 46.85% and in July is 36.86%.

Chart for HES


Healthcare Focus: Income Opportunities

A May covered call on MCK at strike $175.00 using 300 shares is offering an income potential of $270. In June, a strike 175.00 covered call offers $1,200 and in August, a strike 175.00 covered call offers $2,310 in premium.

The annualized return by writing covered calls in May is 15.98%, in June is 21.70% and in August is 16.59%.

Chart for MCK

A June covered call on PFE at strike $34.00 using 300 shares is offering an income potential of $150. In July, a strike 34.00 covered call offers $222 in premium.

The annualized return by writing covered calls in June is 13.69% and in July is 12.01%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A May covered call on KO at strike $45.50 using 300 shares is offering an income potential of $87. In June, a strike 46.00 covered call offers $120 and in July, a strike 46.00 covered call offers $183 in premium.

The annualized return by writing covered calls in May is 19.62%, in June is 8.14% and in July is 7.34%.

Chart for KO

A May covered call on ADM at strike $38.00 using 300 shares is offering an income potential of $135. In June, a strike 38.00 covered call offers $282 and in July, a strike 38.00 covered call offers $399 in premium.

The annualized return by writing covered calls in May is 36.72%, in June is 23.31% and in July is 19.61%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A May covered call on DG at strike $85.50 using 300 shares is offering an income potential of $120. In June, a strike 87.50 covered call offers $495 and in August, a strike 87.50 covered call offers $570 in premium.

The annualized return by writing covered calls in May is 14.37%, in June is 18.05% and in August is 8.09%.

Chart for DG

A June covered call on FOXA at strike $30.00 using 300 shares is offering an income potential of $150. In July, a strike 30.00 covered call offers $435 in premium.

The annualized return by writing covered calls in June is 15.78% and in July is 27.84%.

Chart for FOXA


Financials Focus: Income Opportunities

A May covered call on JPM at strike $61.50 using 300 shares is offering an income potential of $201. In June, a strike 62.50 covered call offers $330 and in July, a strike 62.50 covered call offers $465 in premium.

The annualized return by writing covered calls in May is 33.66%, in June is 16.70% and in July is 13.95%.

Chart for JPM

A May covered call on AXP at strike $64.00 using 300 shares is offering an income potential of $261. In June, a strike 65.00 covered call offers $348 and in July, a strike 65.00 covered call offers $492 in premium.

The annualized return by writing covered calls in May is 41.93%, in June is 16.85% and in July is 14.12%.

Chart for AXP


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $85.00 using 300 shares is offering an income potential of $417. In June, a strike 85.00 covered call offers $696 and in August, a strike 85.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in May is 50.79%, in June is 25.72% and in August is 17.35%.

Chart for UNP

A May covered call on DHR at strike $97.50 using 300 shares is offering an income potential of $270. In June, a strike 97.50 covered call offers $540 and in September, a strike 97.50 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 28.47%, in June is 17.24% and in September is 10.73%.

Chart for DHR


Materials Focus: Income Opportunities

A May covered call on FCX at strike $11.00 using 300 shares is offering an income potential of $156. In June, a strike 11.00 covered call offers $306 and in July, a strike 11.00 covered call offers $384 in premium.

The annualized return by writing covered calls in May is 158.17%, in June is 97.97% and in July is 74.36%.

Chart for FCX

A May covered call on HUN at strike $14.00 using 300 shares is offering an income potential of $135. In June, a strike 14.00 covered call offers $225 and in August, a strike 14.00 covered call offers $375 in premium.

The annualized return by writing covered calls in May is 101.24%, in June is 51.77% and in August is 34.82%.

Chart for HUN


Utilities Focus: Income Opportunities

A June covered call on DUK at strike $82.50 using 300 shares is offering an income potential of $135. In July, a strike 82.50 covered call offers $255 in premium.

The annualized return by writing covered calls in June is 5.16% and in July is 5.76%.

Chart for DUK

A May covered call on ED at strike $75.00 using 300 shares is offering an income potential of $150. In June, a strike 75.00 covered call offers $330 and in August, a strike 75.00 covered call offers $585 in premium.

The annualized return by writing covered calls in May is 20.59%, in June is 13.70% and in August is 9.54%.

Chart for ED


Telecommunications Focus: Income Opportunities

A May covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $90. In June, a strike 105.00 covered call offers $420 and in September, a strike 105.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in May is 9.13%, in June is 12.93% and in September is 9.79%.

Chart for SBAC

A May covered call on T at strike $39.00 using 300 shares is offering an income potential of $87. In June, a strike 39.00 covered call offers $189 and in July, a strike 39.00 covered call offers $240 in premium.

The annualized return by writing covered calls in May is 22.87%, in June is 15.04% and in July is 11.28%.

Chart for T

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

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