Income Alerts Newsletter for 05/17/2016

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 10 2016 are offering a 1.00% return, which annualizes at a rate of 14.64%.

Chart for DIA

The SPY options at strike $207.00 for June 10 2016 are offering a 1.27% return, which annualizes at a rate of 18.52%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on QCOM at strike $52.00 using 300 shares is offering an income potential of $123. In June, a strike 52.50 covered call offers $234 and in July, a strike 52.50 covered call offers $411 in premium.

The annualized return by writing covered calls in May is 58.12%, in June is 16.87% and in July is 16.22%.

Chart for QCOM

A May covered call on BABA at strike $79.50 using 300 shares is offering an income potential of $261. In June, a strike 80.00 covered call offers $696 and in July, a strike 80.00 covered call offers $975 in premium.

The annualized return by writing covered calls in May is 80.99%, in June is 33.34% and in July is 25.57%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on OXY at strike $77.00 using 300 shares is offering an income potential of $165. In June, a strike 77.50 covered call offers $411 and in August, a strike 77.50 covered call offers $855 in premium.

The annualized return by writing covered calls in May is 52.84%, in June is 20.16% and in August is 14.71%.

Chart for OXY

A May covered call on APC at strike $49.50 using 300 shares is offering an income potential of $282. In June, a strike 50.00 covered call offers $657 and in August, a strike 50.00 covered call offers $1,230 in premium.

The annualized return by writing covered calls in May is 142.28%, in June is 51.56% and in August is 34.59%.

Chart for APC


Healthcare Focus: Income Opportunities

A June covered call on PFE at strike $34.00 using 300 shares is offering an income potential of $93. In July, a strike 34.00 covered call offers $174 in premium.

The annualized return by writing covered calls in June is 10.37% and in July is 10.58%.

Chart for PFE

A May covered call on ESRX at strike $73.00 using 300 shares is offering an income potential of $171. In June, a strike 75.00 covered call offers $285 and in July, a strike 75.00 covered call offers $498 in premium.

The annualized return by writing covered calls in May is 57.64%, in June is 14.63% and in July is 13.97%.

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 $147. In June, a strike 105.00 covered call offers $519 and in August, a strike 105.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in May is 34.37%, in June is 18.61% and in August is 12.78%.

Chart for CVS

A June covered call on KO at strike $46.00 using 300 shares is offering an income potential of $138. In July, a strike 46.00 covered call offers $222 in premium.

The annualized return by writing covered calls in June is 11.27% and in July is 9.87%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

A May covered call on HD at strike $136.00 using 300 shares is offering an income potential of $723. In June, a strike 140.00 covered call offers $444 and in July, a strike 140.00 covered call offers $660 in premium.

The annualized return by writing covered calls in May is 132.35%, in June is 12.23% and in July is 9.89%.

Chart for HD

A May covered call on AMZN at strike $712.50 using 300 shares is offering an income potential of $1,860. In June, a strike 715.00 covered call offers $5,730 and in July, a strike 715.00 covered call offers $8,535 in premium.

The annualized return by writing covered calls in May is 64.25%, in June is 30.55% and in July is 24.95%.

Chart for AMZN


Financials Focus: Income Opportunities

A May covered call on JPM at strike $62.00 using 300 shares is offering an income potential of $99. In June, a strike 62.50 covered call offers $309 and in July, a strike 62.50 covered call offers $495 in premium.

The annualized return by writing covered calls in May is 39.28%, in June is 18.79% and in July is 16.45%.

Chart for JPM

A June covered call on MS at strike $27.00 using 300 shares is offering an income potential of $159. In July, a strike 27.00 covered call offers $270 in premium.

The annualized return by writing covered calls in June is 22.83% and in July is 21.28%.

Chart for MS


Industrials Focus: Income Opportunities

A May covered call on UTX at strike $102.00 using 300 shares is offering an income potential of $123. In June, a strike 105.00 covered call offers $162 and in August, a strike 105.00 covered call offers $564 in premium.

The annualized return by writing covered calls in May is 29.51%, in June is 5.90% and in August is 7.15%.

Chart for UTX

A June covered call on DHR at strike $100.00 using 300 shares is offering an income potential of $345. In September, a strike 100.00 covered call offers $990 in premium.

The annualized return by writing covered calls in June is 13.05% and in September is 10.19%.

Chart for DHR


Materials Focus: Income Opportunities

A June covered call on HUN at strike $15.00 using 300 shares is offering an income potential of $90. In August, a strike 15.00 covered call offers $225 in premium.

The annualized return by writing covered calls in June is 24.22% and in August is 21.52%.

Chart for HUN

A May covered call on MON at strike $99.00 using 300 shares is offering an income potential of $456. In June, a strike 100.00 covered call offers $1,095 and in July, a strike 100.00 covered call offers $1,425 in premium.

The annualized return by writing covered calls in May is 114.68%, in June is 42.66% and in July is 30.39%.

Chart for MON


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 $285 and in July, a strike 72.50 covered call offers $405 in premium.

The annualized return by writing covered calls in May is 35.55%, in June is 14.74% and in July is 11.40%.

Chart for D

A June covered call on NEE at strike $125.00 using 300 shares is offering an income potential of $150. In September, a strike 125.00 covered call offers $615 in premium.

The annualized return by writing covered calls in June is 4.57% and in September is 5.05%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A June covered call on T at strike $40.00 using 300 shares is offering an income potential of $84. In July, a strike 40.00 covered call offers $138 in premium.

The annualized return by writing covered calls in June is 7.94% and in July is 7.09%.

Chart for T

A May covered call on TMUS at strike $41.00 using 300 shares is offering an income potential of $96. In June, a strike 41.00 covered call offers $336 and in August, a strike 41.00 covered call offers $654 in premium.

The annualized return by writing covered calls in May is 57.97%, in June is 31.36% and in August is 21.56%.

Chart for TMUS

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

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