Income Alerts Newsletter for 05/19/2016

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 SPY options at strike $205.00 for June 10 2016 are offering a 1.31% return, which annualizes at a rate of 20.79%.

Chart for SPY


Technology Focus: Income Opportunities

A May covered call on QCOM at strike $53.00 using 300 shares is offering an income potential of $90. In June, a strike 55.00 covered call offers $81 and in July, a strike 55.00 covered call offers $201 in premium.

The annualized return by writing covered calls in May is 69.54%, in June is 6.05% and in July is 7.95%.

Chart for QCOM

A May covered call on BABA at strike $79.50 using 300 shares is offering an income potential of $195. In June, a strike 80.00 covered call offers $567 and in July, a strike 80.00 covered call offers $843 in premium.

The annualized return by writing covered calls in May is 100.90%, in June is 28.85% and in July is 22.81%.

Chart for BABA


Energy Focus: Income Opportunities

A May covered call on CVX at strike $101.00 using 300 shares is offering an income potential of $117. In June, a strike 105.00 covered call offers $159 and in July, a strike 105.00 covered call offers $366 in premium.

The annualized return by writing covered calls in May is 47.61%, in June is 6.27% and in July is 7.64%.

Chart for CVX

A May covered call on EOG at strike $80.50 using 300 shares is offering an income potential of $225. In June, a strike 82.50 covered call offers $573 and in July, a strike 82.50 covered call offers $930 in premium.

The annualized return by writing covered calls in May is 114.55%, in June is 28.65% and in July is 24.81%.

Chart for EOG


Healthcare Focus: Income Opportunities

A May covered call on ESRX at strike $73.00 using 300 shares is offering an income potential of $111. In June, a strike 75.00 covered call offers $210 and in July, a strike 75.00 covered call offers $423 in premium.

The annualized return by writing covered calls in May is 62.40%, in June is 11.48% and in July is 12.27%.

Chart for ESRX

A May covered call on MCK at strike $180.00 using 300 shares is offering an income potential of $360. In June, a strike 180.00 covered call offers $1,470 and in August, a strike 180.00 covered call offers $2,580 in premium.

The annualized return by writing covered calls in May is 81.71%, in June is 32.97% and in August is 19.50%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A May covered call on PM at strike $99.00 using 300 shares is offering an income potential of $222. In June, a strike 100.00 covered call offers $387 and in September, a strike 100.00 covered call offers $945 in premium.

The annualized return by writing covered calls in May is 91.67%, in June is 15.55% and in September is 9.84%.

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 $960. In June, a strike 700.00 covered call offers $5,790 and in July, a strike 700.00 covered call offers $8,520 in premium.

The annualized return by writing covered calls in May is 56.08%, in June is 33.51% and in July is 26.26%.

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 June covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $87. In July, a strike 15.00 covered call offers $144 in premium.

The annualized return by writing covered calls in June is 23.71% and in July is 20.90%.

Chart for BAC

A May covered call on GS at strike $160.00 using 300 shares is offering an income potential of $321. In June, a strike 160.00 covered call offers $1,305 and in July, a strike 160.00 covered call offers $1,860 in premium.

The annualized return by writing covered calls in May is 81.94%, in June is 32.92% and in July is 24.95%.

Chart for GS


Industrials Focus: Income Opportunities

A June covered call on DHR at strike $100.00 using 300 shares is offering an income potential of $330. In September, a strike 100.00 covered call offers $840 in premium.

The annualized return by writing covered calls in June is 13.32% and in September is 8.77%.

Chart for DHR

A May covered call on BA at strike $131.00 using 300 shares is offering an income potential of $366. In June, a strike 135.00 covered call offers $447 and in July, a strike 135.00 covered call offers $822 in premium.

The annualized return by writing covered calls in May is 114.38%, in June is 13.55% and in July is 13.22%.

Chart for BA


Materials Focus: Income Opportunities

A May covered call on MON at strike $97.50 using 300 shares is offering an income potential of $231. In June, a strike 97.50 covered call offers $945 and in July, a strike 97.50 covered call offers $1,560 in premium.

The annualized return by writing covered calls in May is 97.22%, in June is 39.46% and in July is 34.99%.

Chart for MON

A May covered call on NEM at strike $34.00 using 300 shares is offering an income potential of $111. In June, a strike 34.00 covered call offers $525 and in July, a strike 34.00 covered call offers $729 in premium.

The annualized return by writing covered calls in May is 135.80%, in June is 64.86% and in July is 48.35%.

Chart for NEM


Utilities Focus: Income Opportunities

A June covered call on CNP at strike $22.00 using 300 shares is offering an income potential of $75. In August, a strike 22.00 covered call offers $180 in premium.

The annualized return by writing covered calls in June is 13.83% and in August is 11.13%.

Chart for CNP

A June covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $345. In September, a strike 120.00 covered call offers $885 in premium.

The annualized return by writing covered calls in June is 11.59% and in September is 7.67%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A June covered call on VOD at strike $35.00 using 300 shares is offering an income potential of $78. In July, a strike 35.00 covered call offers $135 in premium.

The annualized return by writing covered calls in June is 9.04% and in July is 8.27%.

Chart for VOD

A June covered call on T at strike $39.00 using 300 shares is offering an income potential of $111. In July, a strike 39.00 covered call offers $162 in premium.

The annualized return by writing covered calls in June is 11.44% and in July is 8.81%.

Chart for T

* 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.