Income Alerts Newsletter for 05/18/2016

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 $189.00 for June 18 2016 are offering a 0.01% return, which annualizes at a rate of 0.06%.

Chart for DIA

The SPY options at strike $205.00 for June 10 2016 are offering a 1.37% return, which annualizes at a rate of 20.85%.

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 $120. In June, a strike 52.50 covered call offers $231 and in July, a strike 52.50 covered call offers $390 in premium.

The annualized return by writing covered calls in May is 70.75%, in June is 17.15% and in July is 15.60%.

Chart for QCOM

A May covered call on BABA at strike $79.50 using 300 shares is offering an income potential of $210. In June, a strike 80.00 covered call offers $633 and in July, a strike 80.00 covered call offers $900 in premium.

The annualized return by writing covered calls in May is 81.21%, in June is 31.16% and in July is 23.90%.

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 $183. In June, a strike 77.50 covered call offers $432 and in August, a strike 77.50 covered call offers $882 in premium.

The annualized return by writing covered calls in May is 73.50%, in June is 21.93% and in August is 15.39%.

Chart for OXY

A May covered call on APC at strike $50.00 using 300 shares is offering an income potential of $273. In June, a strike 50.00 covered call offers $729 and in August, a strike 50.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in May is 170.05%, in June is 58.59% and in August is 36.36%.

Chart for APC


Healthcare Focus: Income Opportunities

A July covered call on PFE at strike $34.00 using 300 shares is offering an income potential of $129.

The annualized return by writing covered calls in July is 8.02%.

Chart for PFE

A May covered call on JNJ at strike $114.00 using 300 shares is offering an income potential of $96. In June, a strike 115.00 covered call offers $225 and in July, a strike 115.00 covered call offers $480 in premium.

The annualized return by writing covered calls in May is 25.72%, in June is 7.57% and in July is 8.67%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

A May covered call on CVS at strike $103.00 using 300 shares is offering an income potential of $111. In June, a strike 105.00 covered call offers $261 and in August, a strike 105.00 covered call offers $678 in premium.

The annualized return by writing covered calls in May is 33.19%, in June is 9.80% and in August is 8.70%.

Chart for CVS

A May covered call on PM at strike $100.00 using 300 shares is offering an income potential of $144. In June, a strike 100.00 covered call offers $474 and in September, a strike 100.00 covered call offers $945 in premium.

The annualized return by writing covered calls in May is 44.08%, in June is 18.34% and in September is 9.67%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A May covered call on AMZN at strike $697.50 using 300 shares is offering an income potential of $3,120. In June, a strike 700.00 covered call offers $5,535 and in July, a strike 700.00 covered call offers $9,855 in premium.

The annualized return by writing covered calls in May is 138.57%, in June is 31.09% and in July is 30.17%.

Chart for AMZN

A May covered call on TWC at strike $210.00 using 300 shares is offering an income potential of $300. In June, a strike 210.00 covered call offers $1,050 and in July, a strike 210.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in May is 43.75%, in June is 19.37% and in July is 12.44%.

Chart for TWC


Financials Focus: Income Opportunities

A May covered call on JPM at strike $62.00 using 300 shares is offering an income potential of $78. 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 38.64%, in June is 19.38% and in July is 16.73%.

Chart for JPM

A May covered call on AXP at strike $63.00 using 300 shares is offering an income potential of $114. In June, a strike 65.00 covered call offers $171 and in July, a strike 65.00 covered call offers $303 in premium.

The annualized return by writing covered calls in May is 55.59%, in June is 10.45% and in July is 9.95%.

Chart for AXP


Industrials Focus: Income Opportunities

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 $930 in premium.

The annualized return by writing covered calls in June is 13.48% and in September is 9.65%.

Chart for DHR

A May covered call on BA at strike $133.00 using 300 shares is offering an income potential of $276. In June, a strike 135.00 covered call offers $627 and in July, a strike 135.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in May is 63.77%, in June is 18.27% and in July is 16.01%.

Chart for BA


Materials Focus: Income Opportunities

A June covered call on HUN at strike $15.00 using 300 shares is offering an income potential of $120. In August, a strike 15.00 covered call offers $285 in premium.

The annualized return by writing covered calls in June is 32.80% and in August is 27.32%.

Chart for HUN

A May covered call on LYB at strike $85.00 using 300 shares is offering an income potential of $135. In June, a strike 85.00 covered call offers $570 and in September, a strike 85.00 covered call offers $1,320 in premium.

The annualized return by writing covered calls in May is 49.21%, in June is 26.43% and in September is 16.43%.

Chart for LYB


Utilities Focus: Income Opportunities

A May covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $150. In June, a strike 120.00 covered call offers $540 and in September, a strike 120.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in May is 38.25%, in June is 17.40% and in September is 9.20%.

Chart for NEE

A June covered call on AEP at strike $65.00 using 300 shares is offering an income potential of $330. In August, a strike 65.00 covered call offers $615 in premium.

The annualized return by writing covered calls in June is 19.79% and in August is 12.61%.

Chart for AEP


Telecommunications Focus: Income Opportunities

A July covered call on T at strike $40.00 using 300 shares is offering an income potential of $114.

The annualized return by writing covered calls in July is 5.97%.

Chart for T

A May covered call on TMUS at strike $41.00 using 300 shares is offering an income potential of $84. In June, a strike 41.00 covered call offers $345 and in August, a strike 41.00 covered call offers $648 in premium.

The annualized return by writing covered calls in May is 63.18%, in June is 33.15% and in August is 21.52%.

Chart for TMUS

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

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.