Income Alerts Newsletter for 05/26/2016

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 $109.50 for June 18 2016 are offering a 1.11% return, which annualizes at a rate of 16.89%.

Chart for QQQ

The DIA options at strike $178.50 for June 18 2016 are offering a 0.95% return, which annualizes at a rate of 14.47%.

Chart for DIA

The SPY options at strike $209.50 for June 18 2016 are offering a 1.01% return, which annualizes at a rate of 15.42%.

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 $252. In July, a strike 57.50 covered call offers $225 and in August, a strike 57.50 covered call offers $474 in premium.

The annualized return by writing covered calls in June is 23.17%, in July is 9.53% and in August is 12.19%.

Chart for QCOM

A June covered call on AAPL at strike $100.00 using 300 shares is offering an income potential of $492. In July, a strike 100.00 covered call offers $843 and in August, a strike 100.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in June is 25.46%, in July is 20.37% and in August is 16.87%.

Chart for AAPL


Energy Focus: Income Opportunities

A June covered call on EOG at strike $83.50 using 300 shares is offering an income potential of $612. In July, a strike 85.00 covered call offers $798 and in October, a strike 85.00 covered call offers $1,605 in premium.

The annualized return by writing covered calls in June is 38.28%, in July is 23.22% and in October is 16.75%.

Chart for EOG

A June covered call on HAL at strike $42.50 using 300 shares is offering an income potential of $339. In July, a strike 43.00 covered call offers $444 and in August, a strike 43.00 covered call offers $624 in premium.

The annualized return by writing covered calls in June is 41.59%, in July is 25.36% and in August is 21.62%.

Chart for HAL


Healthcare Focus: Income Opportunities

A June covered call on GILD at strike $87.00 using 300 shares is offering an income potential of $444. In July, a strike 87.50 covered call offers $681 and in August, a strike 87.50 covered call offers $1,065 in premium.

The annualized return by writing covered calls in June is 26.47%, in July is 18.91% and in August is 17.95%.

Chart for GILD

A June covered call on HCA at strike $78.00 using 300 shares is offering an income potential of $450. In July, a strike 80.00 covered call offers $495 and in September, a strike 80.00 covered call offers $990 in premium.

The annualized return by writing covered calls in June is 29.93%, in July is 15.22% and in September is 14.07%.

Chart for HCA


Consumer Staples Focus: Income Opportunities

A June covered call on PM at strike $99.50 using 300 shares is offering an income potential of $357. In July, a strike 100.00 covered call offers $411 and in September, a strike 100.00 covered call offers $786 in premium.

The annualized return by writing covered calls in June is 18.49%, in July is 9.84% and in September is 8.62%.

Chart for PM

A June covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $495. In July, a strike 160.00 covered call offers $1,170 and in October, a strike 160.00 covered call offers $2,250 in premium.

The annualized return by writing covered calls in June is 16.16%, in July is 17.89% and in October is 12.22%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A June covered call on CBS at strike $54.00 using 300 shares is offering an income potential of $336. In July, a strike 55.00 covered call offers $384 and in September, a strike 55.00 covered call offers $705 in premium.

The annualized return by writing covered calls in June is 32.25%, in July is 17.06% and in September is 14.46%.

Chart for CBS

A June covered call on CMCSA at strike $63.00 using 300 shares is offering an income potential of $246. In July, a strike 65.00 covered call offers $150 and in October, a strike 65.00 covered call offers $555 in premium.

The annualized return by writing covered calls in June is 20.19%, in July is 5.65% and in October is 7.41%.

Chart for CMCSA


Financials Focus: Income Opportunities

A June covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $93. In July, a strike 15.00 covered call offers $153 and in August, a strike 15.00 covered call offers $213 in premium.

The annualized return by writing covered calls in June is 32.27%, in July is 24.84% and in August is 20.96%.

Chart for BAC

A June covered call on GS at strike $162.50 using 300 shares is offering an income potential of $762. In July, a strike 165.00 covered call offers $1,020 and in October, a strike 165.00 covered call offers $2,115 in premium.

The annualized return by writing covered calls in June is 24.26%, in July is 15.07% and in October is 11.09%.

Chart for GS


Industrials Focus: Income Opportunities

A June covered call on UNP at strike $83.00 using 300 shares is offering an income potential of $408. In July, a strike 85.00 covered call offers $447 and in August, a strike 85.00 covered call offers $741 in premium.

The annualized return by writing covered calls in June is 25.36%, in July is 12.85% and in August is 12.88%.

Chart for UNP

A June covered call on HTZ at strike $9.50 using 300 shares is offering an income potential of $90. In July, a strike 10.00 covered call offers $105 and in September, a strike 10.00 covered call offers $225 in premium.

The annualized return by writing covered calls in June is 51.85%, in July is 28.08% and in September is 28.51%.

Chart for HTZ


Materials Focus: Income Opportunities

A June covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $315. In July, a strike 110.00 covered call offers $630 and in August, a strike 110.00 covered call offers $930 in premium.

The annualized return by writing covered calls in June is 14.89%, in July is 13.88% and in August is 12.36%.

Chart for PPG

A June covered call on DOW at strike $53.50 using 300 shares is offering an income potential of $204. In July, a strike 55.00 covered call offers $195 and in September, a strike 55.00 covered call offers $453 in premium.

The annualized return by writing covered calls in June is 19.72%, in July is 8.69% and in September is 9.28%.

Chart for DOW


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 7.73%.

Chart for CNP

A June covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $315. In July, a strike 120.00 covered call offers $585 and in September, a strike 120.00 covered call offers $960 in premium.

The annualized return by writing covered calls in June is 13.53%, in July is 11.68% and in September is 8.76%.

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 $87. In July, a strike 39.00 covered call offers $147 and in August, a strike 39.00 covered call offers $207 in premium.

The annualized return by writing covered calls in June is 11.49%, in July is 9.00% and in August is 7.62%.

Chart for T

A June covered call on TMUS at strike $42.50 using 300 shares is offering an income potential of $261. In July, a strike 43.00 covered call offers $354 and in August, a strike 43.00 covered call offers $552 in premium.

The annualized return by writing covered calls in June is 32.08%, in July is 20.23% and in August is 19.16%.

Chart for TMUS

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

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