Income Alerts Newsletter for 05/11/2017

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 $137.00 for June 2 2017 are offering a 1.59% return, which annualizes at a rate of 26.35%.

Chart for QQQ

The DIA options at strike $210.00 for June 2 2017 are offering a 0.48% return, which annualizes at a rate of 7.97%.

Chart for DIA

The SPY options at strike $239.00 for June 2 2017 are offering a 0.98% return, which annualizes at a rate of 16.21%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on QCOM at strike $55.50 using 300 shares is offering an income potential of $150. In June, a strike 57.50 covered call offers $108 and in July, a strike 57.50 covered call offers $321 in premium.

The annualized return by writing covered calls in May is 41.61%, in June is 6.64% and in July is 10.14%.

Chart for QCOM

A May covered call on FB at strike $152.50 using 300 shares is offering an income potential of $207. In June, a strike 155.00 covered call offers $462 and in July, a strike 155.00 covered call offers $900 in premium.

The annualized return by writing covered calls in May is 21.04%, in June is 10.50% and in July is 10.47%.

Chart for FB


Energy Focus: Income Opportunities

A May covered call on EOG at strike $95.00 using 300 shares is offering an income potential of $312. In June, a strike 95.00 covered call offers $819 and in July, a strike 95.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in May is 50.75%, in June is 30.15% and in July is 21.23%.

Chart for EOG

A May covered call on OXY at strike $61.50 using 300 shares is offering an income potential of $174. In June, a strike 62.50 covered call offers $240 and in August, a strike 62.50 covered call offers $489 in premium.

The annualized return by writing covered calls in May is 43.56%, in June is 13.40% and in August is 10.07%.

Chart for OXY


Healthcare Focus: Income Opportunities

A May covered call on MRK at strike $64.00 using 300 shares is offering an income potential of $300. In June, a strike 65.00 covered call offers $222 and in July, a strike 65.00 covered call offers $363 in premium.

The annualized return by writing covered calls in May is 72.49%, in June is 11.87% and in July is 9.92%.

Chart for MRK

A May covered call on MCK at strike $144.00 using 300 shares is offering an income potential of $840. In June, a strike 145.00 covered call offers $1,020 and in August, a strike 145.00 covered call offers $1,890 in premium.

The annualized return by writing covered calls in May is 90.97%, in June is 24.65% and in August is 16.96%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A May covered call on CVS at strike $81.00 using 300 shares is offering an income potential of $234. In June, a strike 85.00 covered call offers $93 and in July, a strike 85.00 covered call offers $231 in premium.

The annualized return by writing covered calls in May is 44.40%, in June is 3.90% and in July is 4.94%.

Chart for CVS

A May covered call on PM at strike $111.00 using 300 shares is offering an income potential of $249. In June, a strike 115.00 covered call offers $153 and in September, a strike 115.00 covered call offers $561 in premium.

The annualized return by writing covered calls in May is 34.43%, in June is 4.69% and in September is 4.93%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A May covered call on GM at strike $34.50 using 300 shares is offering an income potential of $84. In June, a strike 35.00 covered call offers $141 and in September, a strike 35.00 covered call offers $381 in premium.

The annualized return by writing covered calls in May is 37.63%, in June is 14.12% and in September is 11.07%.

Chart for GM

A June covered call on CMCSA at strike $40.00 using 300 shares is offering an income potential of $135. In July, a strike 40.00 covered call offers $243 in premium.

The annualized return by writing covered calls in June is 11.80% and in July is 10.88%.

Chart for CMCSA


Financials Focus: Income Opportunities

A May covered call on JPM at strike $87.50 using 300 shares is offering an income potential of $219. In June, a strike 87.50 covered call offers $501 and in July, a strike 87.50 covered call offers $774 in premium.

The annualized return by writing covered calls in May is 38.42%, in June is 19.74% and in July is 15.63%.

Chart for JPM

A May covered call on MS at strike $43.50 using 300 shares is offering an income potential of $99. In June, a strike 44.00 covered call offers $216 and in July, a strike 44.00 covered call offers $417 in premium.

The annualized return by writing covered calls in May is 35.20%, in June is 17.23% and in July is 17.13%.

Chart for MS


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $110.00 using 300 shares is offering an income potential of $258. In June, a strike 110.00 covered call offers $573 and in August, a strike 110.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in May is 36.18%, in June is 18.03% and in August is 14.73%.

Chart for UNP

A May covered call on UTX at strike $122.00 using 300 shares is offering an income potential of $96. In June, a strike 125.00 covered call offers $90 and in August, a strike 125.00 covered call offers $447 in premium.

The annualized return by writing covered calls in May is 12.10%, in June is 2.52% and in August is 4.60%.

Chart for UTX


Materials Focus: Income Opportunities

A May covered call on HUN at strike $26.00 using 300 shares is offering an income potential of $105. In June, a strike 26.00 covered call offers $240 and in August, a strike 26.00 covered call offers $450 in premium.

The annualized return by writing covered calls in May is 62.55%, in June is 32.34% and in August is 22.68%.

Chart for HUN

A July covered call on MON at strike $120.00 using 300 shares is offering an income potential of $150.

The annualized return by writing covered calls in July is 2.23%.

Chart for MON


Utilities Focus: Income Opportunities

A May covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $120. In June, a strike 67.50 covered call offers $270 and in August, a strike 67.50 covered call offers $465 in premium.

The annualized return by writing covered calls in May is 27.23%, in June is 13.72% and in August is 8.68%.

Chart for AEP

An August covered call on AES at strike $12.00 using 300 shares is offering an income potential of $75.

The annualized return by writing covered calls in August is 8.14%.

Chart for AES


Telecommunications Focus: Income Opportunities

A May covered call on VOD at strike $27.50 using 300 shares is offering an income potential of $75. In July, a strike 28.00 covered call offers $78 in premium.

The annualized return by writing covered calls in May is 42.43% and in July is 4.97%.

Chart for VOD

A July covered call on CTL at strike $26.00 using 300 shares is offering an income potential of $105.

The annualized return by writing covered calls in July is 7.27%.

Chart for CTL

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

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