Income Alerts Newsletter for 05/24/2016

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 $205.50 for June 18 2016 are offering a 1.19% return, which annualizes at a rate of 16.68%.

Chart for SPY


Technology Focus: Income Opportunities

A June covered call on QCOM at strike $54.50 using 300 shares is offering an income potential of $204. In July, a strike 55.00 covered call offers $318 and in October, a strike 55.00 covered call offers $786 in premium.

The annualized return by writing covered calls in June is 17.84%, in July is 13.49% and in October is 12.20%.

Chart for QCOM

A June covered call on BABA at strike $80.00 using 300 shares is offering an income potential of $477. In July, a strike 80.00 covered call offers $765 and in August, a strike 80.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in June is 28.83%, in July is 22.55% and in August is 21.87%.

Chart for BABA


Energy Focus: Income Opportunities

A June covered call on SLB at strike $75.50 using 300 shares is offering an income potential of $396. In August, a strike 77.50 covered call offers $675 and in November, a strike 77.50 covered call offers $1,110 in premium.

The annualized return by writing covered calls in June is 25.15%, in August is 12.68% and in November is 10.52%.

Chart for SLB

A June covered call on CVX at strike $99.50 using 300 shares is offering an income potential of $615. In July, a strike 100.00 covered call offers $945 and in September, a strike 100.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in June is 29.57%, in July is 22.13% and in September is 14.11%.

Chart for CVX


Healthcare Focus: Income Opportunities

A June covered call on ESRX at strike $73.00 using 300 shares is offering an income potential of $480. In July, a strike 75.00 covered call offers $423 and in August, a strike 75.00 covered call offers $714 in premium.

The annualized return by writing covered calls in June is 31.50%, in July is 13.33% and in August is 13.84%.

Chart for ESRX

A June covered call on MCK at strike $180.00 using 300 shares is offering an income potential of $1,110. In July, a strike 180.00 covered call offers $1,770 and in August, a strike 180.00 covered call offers $3,030 in premium.

The annualized return by writing covered calls in June is 29.69%, in July is 23.09% and in August is 24.58%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A June covered call on ADM at strike $40.50 using 300 shares is offering an income potential of $285. In July, a strike 41.00 covered call offers $363 and in August, a strike 41.00 covered call offers $516 in premium.

The annualized return by writing covered calls in June is 33.77%, in July is 20.85% and in August is 18.22%.

Chart for ADM

A June covered call on PM at strike $98.50 using 300 shares is offering an income potential of $417. In July, a strike 100.00 covered call offers $351 and in September, a strike 100.00 covered call offers $720 in premium.

The annualized return by writing covered calls in June is 20.14%, in July is 8.14% and in September is 7.81%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A June covered call on CMCSA at strike $62.50 using 300 shares is offering an income potential of $237. In July, a strike 62.50 covered call offers $450 and in October, a strike 62.50 covered call offers $873 in premium.

The annualized return by writing covered calls in June is 18.17%, in July is 16.81% and in October is 11.86%.

Chart for CMCSA

A June covered call on AMZN at strike $697.50 using 300 shares is offering an income potential of $5,025. In July, a strike 700.00 covered call offers $7,590 and in August, a strike 700.00 covered call offers $13,005 in premium.

The annualized return by writing covered calls in June is 34.58%, in July is 25.47% and in August is 27.21%.

Chart for AMZN


Financials Focus: Income Opportunities

A June covered call on BAC at strike $14.50 using 300 shares is offering an income potential of $105. In July, a strike 15.00 covered call offers $108 and in August, a strike 15.00 covered call offers $162 in premium.

The annualized return by writing covered calls in June is 34.80%, in July is 17.25% and in August is 15.90%.

Chart for BAC

A June covered call on MET at strike $44.50 using 300 shares is offering an income potential of $297. In July, a strike 45.00 covered call offers $393 and in August, a strike 45.00 covered call offers $528 in premium.

The annualized return by writing covered calls in June is 31.99%, in July is 20.53% and in August is 16.91%.

Chart for MET


Industrials Focus: Income Opportunities

A June covered call on HTZ at strike $9.00 using 300 shares is offering an income potential of $120. In July, a strike 9.00 covered call offers $195 and in September, a strike 9.00 covered call offers $315 in premium.

The annualized return by writing covered calls in June is 66.77%, in July is 53.84% and in September is 42.21%.

Chart for HTZ

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 and in December, a strike 100.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in June is 16.53%, in September is 10.10% and in December is 7.79%.

Chart for DHR


Materials Focus: Income Opportunities

A June covered call on MON at strike $110.00 using 300 shares is offering an income potential of $900. In July, a strike 110.00 covered call offers $1,320 and in October, a strike 110.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in June is 40.89%, in July is 29.27% and in October is 13.39%.

Chart for MON

A June covered call on NEM at strike $34.00 using 300 shares is offering an income potential of $489. In July, a strike 34.00 covered call offers $729 and in September, a strike 34.00 covered call offers $1,095 in premium.

The annualized return by writing covered calls in June is 71.06%, in July is 52.31% and in September is 37.73%.

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 $120. In August, a strike 22.00 covered call offers $255 and in November, a strike 22.00 covered call offers $345 in premium.

The annualized return by writing covered calls in June is 26.02%, in August is 16.50% and in November is 11.20%.

Chart for CNP

A June covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $270. In September, a strike 120.00 covered call offers $870 and in December, a strike 120.00 covered call offers $1,380 in premium.

The annualized return by writing covered calls in June is 10.79%, in September is 7.86% and in December is 7.12%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A July covered call on VOD at strike $34.00 using 300 shares is offering an income potential of $117. In August, a strike 34.00 covered call offers $246 in premium.

The annualized return by writing covered calls in July is 8.05% and in August is 10.41%.

Chart for VOD

A June covered call on TMUS at strike $42.00 using 300 shares is offering an income potential of $294. In August, a strike 42.00 covered call offers $654 and in November, a strike 42.00 covered call offers $816 in premium.

The annualized return by writing covered calls in June is 33.84%, in August is 22.66% and in November is 14.17%.

Chart for TMUS

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

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