Income Alerts Newsletter for 05/25/2016

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 QQQ options at strike $108.50 for June 18 2016 are offering a 1.26% return, which annualizes at a rate of 18.40%.

Chart for QQQ

The DIA options at strike $177.00 for June 18 2016 are offering a 1.11% return, which annualizes at a rate of 16.19%.

Chart for DIA

The SPY options at strike $208.00 for June 18 2016 are offering a 1.11% return, which annualizes at a rate of 16.26%.

Chart for SPY


Technology Focus: Income Opportunities

A June covered call on QCOM at strike $56.00 using 300 shares is offering an income potential of $171. In July, a strike 57.50 covered call offers $189 and in August, a strike 57.50 covered call offers $444 in premium.

The annualized return by writing covered calls in June is 15.13%, in July is 7.89% and in August is 11.34%.

Chart for QCOM

A June covered call on BABA at strike $81.50 using 300 shares is offering an income potential of $555. In July, a strike 82.50 covered call offers $690 and in August, a strike 82.50 covered call offers $1,110 in premium.

The annualized return by writing covered calls in June is 34.07%, in July is 20.10% and in August is 19.82%.

Chart for BABA


Energy Focus: Income Opportunities

A June covered call on EOG at strike $82.50 using 300 shares is offering an income potential of $723. In July, a strike 82.50 covered call offers $1,095 and in October, a strike 82.50 covered call offers $1,935 in premium.

The annualized return by writing covered calls in June is 43.94%, in July is 31.88% and in October is 20.50%.

Chart for EOG

A June covered call on HAL at strike $41.50 using 300 shares is offering an income potential of $321. In July, a strike 42.00 covered call offers $444 and in August, a strike 42.00 covered call offers $624 in premium.

The annualized return by writing covered calls in June is 38.72%, in July is 25.52% and in August is 21.93%.

Chart for HAL


Healthcare Focus: Income Opportunities

A June covered call on MRK at strike $56.00 using 300 shares is offering an income potential of $171. In July, a strike 57.50 covered call offers $129 and in August, a strike 57.50 covered call offers $258 in premium.

The annualized return by writing covered calls in June is 15.12%, in July is 5.37% and in August is 6.52%.

Chart for MRK

A June covered call on PFE at strike $34.50 using 300 shares is offering an income potential of $87. In July, a strike 35.00 covered call offers $102 and in August, a strike 35.00 covered call offers $180 in premium.

The annualized return by writing covered calls in June is 12.52%, in July is 6.94% and in August is 7.43%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A June covered call on PM at strike $99.00 using 300 shares is offering an income potential of $420. In July, a strike 100.00 covered call offers $444 and in September, a strike 100.00 covered call offers $771 in premium.

The annualized return by writing covered calls in June is 20.98%, in July is 10.47% and in September is 8.40%.

Chart for PM

A June covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $585. In July, a strike 160.00 covered call offers $1,320 and in October, a strike 160.00 covered call offers $2,370 in premium.

The annualized return by writing covered calls in June is 18.28%, in July is 19.77% and in October is 12.75%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A June covered call on CMCSA at strike $62.50 using 300 shares is offering an income potential of $297. In July, a strike 62.50 covered call offers $465 and in October, a strike 62.50 covered call offers $894 in premium.

The annualized return by writing covered calls in June is 23.52%, in July is 17.53% and in October is 12.11%.

Chart for CMCSA

A June covered call on DG at strike $84.00 using 300 shares is offering an income potential of $690. In July, a strike 85.00 covered call offers $735 and in August, a strike 85.00 covered call offers $930 in premium.

The annualized return by writing covered calls in June is 41.40%, in July is 20.84% and in August is 16.01%.

Chart for DG


Financials Focus: Income Opportunities

A July covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $123. In August, a strike 15.00 covered call offers $186 in premium.

The annualized return by writing covered calls in July is 19.79% and in August is 18.29%.

Chart for BAC

A June covered call on MET at strike $45.50 using 300 shares is offering an income potential of $270. In July, a strike 47.50 covered call offers $186 and in August, a strike 47.50 covered call offers $306 in premium.

The annualized return by writing covered calls in June is 29.61%, in July is 9.56% and in August is 9.56%.

Chart for MET


Industrials Focus: Income Opportunities

A June covered call on DHR at strike $100.00 using 300 shares is offering an income potential of $450. In July, a strike 100.00 covered call offers $705 and in September, a strike 100.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in June is 22.24%, in July is 16.58% and in September is 11.75%.

Chart for DHR

A June covered call on DAL at strike $44.00 using 300 shares is offering an income potential of $315. In July, a strike 44.00 covered call offers $546 and in September, a strike 44.00 covered call offers $840 in premium.

The annualized return by writing covered calls in June is 36.00%, in July is 29.98% and in September is 21.58%.

Chart for DAL


Materials Focus: Income Opportunities

A June covered call on DOW at strike $53.00 using 300 shares is offering an income potential of $267. In July, a strike 55.00 covered call offers $171 and in September, a strike 55.00 covered call offers $480 in premium.

The annualized return by writing covered calls in June is 25.02%, in July is 7.51% and in September is 9.83%.

Chart for DOW

A June covered call on FCX at strike $11.50 using 300 shares is offering an income potential of $204. In July, a strike 12.00 covered call offers $276 and in August, a strike 12.00 covered call offers $348 in premium.

The annualized return by writing covered calls in June is 95.19%, in July is 62.18% and in August is 48.36%.

Chart for FCX


Utilities Focus: Income Opportunities

An August covered call on CNP at strike $23.00 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in August is 7.67%.

Chart for CNP

A June covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $435. In July, a strike 120.00 covered call offers $675 and in September, a strike 120.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in June is 17.87%, in July is 13.17% and in September is 9.18%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A June covered call on T at strike $39.00 using 300 shares is offering an income potential of $75. In July, a strike 39.00 covered call offers $135 and in August, a strike 39.00 covered call offers $198 in premium.

The annualized return by writing covered calls in June is 9.54%, in July is 8.14% and in August is 7.23%.

Chart for T

A June covered call on TMUS at strike $42.00 using 300 shares is offering an income potential of $306. In July, a strike 42.00 covered call offers $462 and in August, a strike 42.00 covered call offers $672 in premium.

The annualized return by writing covered calls in June is 36.46%, in July is 26.30% and in August is 23.44%.

Chart for TMUS

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

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