Income Alerts Newsletter for 05/12/2016

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 $177.50 for June 3 2016 are offering a 0.98% return, which annualizes at a rate of 15.55%.

Chart for DIA

The SPY options at strike $207.00 for June 3 2016 are offering a 1.10% return, which annualizes at a rate of 17.48%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on QCOM at strike $52.50 using 300 shares is offering an income potential of $138. In June, a strike 52.50 covered call offers $315 and in July, a strike 52.50 covered call offers $438 in premium.

The annualized return by writing covered calls in May is 32.48%, in June is 19.74% and in July is 15.93%.

Chart for QCOM

A May covered call on BABA at strike $80.00 using 300 shares is offering an income potential of $354. In June, a strike 80.00 covered call offers $771 and in July, a strike 80.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in May is 54.78%, in June is 31.96% and in July is 24.99%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on OXY at strike $76.50 using 300 shares is offering an income potential of $315. In June, a strike 77.50 covered call offers $447 and in August, a strike 77.50 covered call offers $900 in premium.

The annualized return by writing covered calls in May is 50.92%, in June is 19.13% and in August is 14.79%.

Chart for OXY

A May covered call on APC at strike $48.00 using 300 shares is offering an income potential of $516. In June, a strike 50.00 covered call offers $555 and in August, a strike 50.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in May is 135.89%, in June is 38.57% and in August is 28.04%.

Chart for APC


Healthcare Focus: Income Opportunities

A May covered call on PFE at strike $33.50 using 300 shares is offering an income potential of $78. In June, a strike 34.00 covered call offers $90 and in July, a strike 34.00 covered call offers $183 in premium.

The annualized return by writing covered calls in May is 28.84%, in June is 8.77% and in July is 10.36%.

Chart for PFE

A May covered call on ESRX at strike $74.00 using 300 shares is offering an income potential of $243. In June, a strike 75.00 covered call offers $459 and in July, a strike 75.00 covered call offers $669 in premium.

The annualized return by writing covered calls in May is 40.61%, in June is 20.39% and in July is 17.27%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

A May covered call on CVS at strike $105.00 using 300 shares is offering an income potential of $198. In June, a strike 105.00 covered call offers $525 and in August, a strike 105.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in May is 23.28%, in June is 16.41% and in August is 12.01%.

Chart for CVS

A May covered call on KO at strike $45.50 using 300 shares is offering an income potential of $105. In June, a strike 46.00 covered call offers $141 and in July, a strike 46.00 covered call offers $207 in premium.

The annualized return by writing covered calls in May is 28.32%, in June is 10.03% and in July is 8.52%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

A May covered call on GM at strike $31.50 using 300 shares is offering an income potential of $78. In June, a strike 32.00 covered call offers $135 and in September, a strike 32.00 covered call offers $351 in premium.

The annualized return by writing covered calls in May is 30.79%, in June is 14.11% and in September is 11.07%.

Chart for GM

A May covered call on HD at strike $135.00 using 300 shares is offering an income potential of $681. In June, a strike 135.00 covered call offers $915 and in July, a strike 135.00 covered call offers $1,215 in premium.

The annualized return by writing covered calls in May is 62.75%, in June is 22.32% and in July is 17.20%.

Chart for HD


Financials Focus: Income Opportunities

A July covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $108.

The annualized return by writing covered calls in July is 14.39%.

Chart for BAC

A May covered call on GS at strike $160.00 using 300 shares is offering an income potential of $723. In June, a strike 160.00 covered call offers $1,455 and in July, a strike 160.00 covered call offers $2,145 in premium.

The annualized return by writing covered calls in May is 56.03%, in June is 30.14% and in July is 25.97%.

Chart for GS


Industrials Focus: Income Opportunities

A May covered call on UNP at strike $84.50 using 300 shares is offering an income potential of $480. In June, a strike 85.00 covered call offers $621 and in August, a strike 85.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in May is 70.45%, in June is 24.12% and in August is 17.96%.

Chart for UNP

A May covered call on UTX at strike $102.00 using 300 shares is offering an income potential of $234. In June, a strike 105.00 covered call offers $210 and in August, a strike 105.00 covered call offers $582 in premium.

The annualized return by writing covered calls in May is 28.24%, in June is 6.66% and in August is 7.03%.

Chart for UTX


Materials Focus: Income Opportunities

A June covered call on HUN at strike $15.00 using 300 shares is offering an income potential of $135. In August, a strike 15.00 covered call offers $315 in premium.

The annualized return by writing covered calls in June is 31.25% and in August is 28.68%.

Chart for HUN

A May covered call on NEM at strike $34.00 using 300 shares is offering an income potential of $309. In June, a strike 34.00 covered call offers $618 and in July, a strike 34.00 covered call offers $819 in premium.

The annualized return by writing covered calls in May is 114.44%, in June is 62.18% and in July is 48.47%.

Chart for NEM


Utilities Focus: Income Opportunities

A May covered call on D at strike $72.50 using 300 shares is offering an income potential of $105. In June, a strike 72.50 covered call offers $255 and in July, a strike 72.50 covered call offers $375 in premium.

The annualized return by writing covered calls in May is 17.90%, in June is 11.52% and in July is 9.81%.

Chart for D

A May covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $255. In June, a strike 120.00 covered call offers $585 and in September, a strike 120.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 26.11%, in June is 15.91% and in September is 8.77%.

Chart for NEE


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 $435 and in September, a strike 105.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in May is 10.80%, in June is 13.90% and in September is 9.79%.

Chart for SBAC

A June covered call on T at strike $40.00 using 300 shares is offering an income potential of $93. In July, a strike 40.00 covered call offers $129 in premium.

The annualized return by writing covered calls in June is 7.66% and in July is 6.14%.

Chart for T

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

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