Income Alerts Newsletter for 05/27/2016

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 $110.00 for June 18 2016 are offering a 1.00% return, which annualizes at a rate of 15.95%.

Chart for QQQ

The DIA options at strike $178.50 for June 18 2016 are offering a 0.87% return, which annualizes at a rate of 13.75%.

Chart for DIA

The SPY options at strike $209.50 for June 18 2016 are offering a 0.99% return, which annualizes at a rate of 15.69%.

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 $183. In July, a strike 57.50 covered call offers $183 and in August, a strike 57.50 covered call offers $423 in premium.

The annualized return by writing covered calls in June is 17.56%, in July is 7.92% and in August is 11.01%.

Chart for QCOM

A June covered call on BABA at strike $78.50 using 300 shares is offering an income potential of $666. In July, a strike 80.00 covered call offers $753 and in August, a strike 80.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in June is 46.28%, in July is 23.69% and in August is 21.33%.

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 $624. In July, a strike 82.50 covered call offers $1,020 and in October, a strike 82.50 covered call offers $1,890 in premium.

The annualized return by writing covered calls in June is 41.15%, in July is 30.84% and in October is 20.31%.

Chart for EOG

A June covered call on HAL at strike $43.00 using 300 shares is offering an income potential of $303. In July, a strike 43.00 covered call offers $471 and in August, a strike 43.00 covered call offers $693 in premium.

The annualized return by writing covered calls in June is 38.50%, in July is 27.36% and in August is 24.31%.

Chart for HAL


Healthcare Focus: Income Opportunities

A June covered call on MRK at strike $56.50 using 300 shares is offering an income potential of $192. In July, a strike 57.50 covered call offers $198 and in August, a strike 57.50 covered call offers $339 in premium.

The annualized return by writing covered calls in June is 18.22%, in July is 8.48% and in August is 8.68%.

Chart for MRK

A June covered call on PFE at strike $34.50 using 300 shares is offering an income potential of $126. In July, a strike 35.00 covered call offers $165 and in August, a strike 35.00 covered call offers $225 in premium.

The annualized return by writing covered calls in June is 19.60%, in July is 11.62% and in August is 9.45%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A June covered call on PM at strike $99.50 using 300 shares is offering an income potential of $318. In July, a strike 100.00 covered call offers $384 and in September, a strike 100.00 covered call offers $756 in premium.

The annualized return by writing covered calls in June is 17.17%, in July is 9.37% and in September is 8.36%.

Chart for PM

A June covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $555. In July, a strike 160.00 covered call offers $1,260 and in October, a strike 160.00 covered call offers $2,280 in premium.

The annualized return by writing covered calls in June is 18.81%, in July is 19.55% and in October is 12.38%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A June covered call on CBS at strike $54.50 using 300 shares is offering an income potential of $309. In July, a strike 55.00 covered call offers $414 and in September, a strike 55.00 covered call offers $750 in premium.

The annualized return by writing covered calls in June is 30.66%, in July is 18.65% and in September is 15.44%.

Chart for CBS

A June covered call on CMCSA at strike $62.50 using 300 shares is offering an income potential of $270. In July, a strike 62.50 covered call offers $438 and in October, a strike 62.50 covered call offers $834 in premium.

The annualized return by writing covered calls in June is 23.27%, in July is 17.18% and in October is 11.44%.

Chart for CMCSA


Financials Focus: Income Opportunities

A July covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $117. In August, a strike 15.00 covered call offers $177 in premium.

The annualized return by writing covered calls in July is 19.51% and in August is 17.75%.

Chart for BAC

A June covered call on GS at strike $160.00 using 300 shares is offering an income potential of $792. In July, a strike 160.00 covered call offers $1,380 and in October, a strike 160.00 covered call offers $2,580 in premium.

The annualized return by writing covered calls in June is 26.76%, in July is 21.29% and in October is 13.99%.

Chart for GS


Industrials Focus: Income Opportunities

A June covered call on HTZ at strike $9.50 using 300 shares is offering an income potential of $105. In July, a strike 10.00 covered call offers $90 and in September, a strike 10.00 covered call offers $240 in premium.

The annualized return by writing covered calls in June is 62.55%, in July is 24.04% and in September is 30.38%.

Chart for HTZ

A June covered call on UTX at strike $101.00 using 300 shares is offering an income potential of $327. In July, a strike 105.00 covered call offers $174 and in August, a strike 105.00 covered call offers $357 in premium.

The annualized return by writing covered calls in June is 17.42%, in July is 4.16% and in August is 5.09%.

Chart for UTX


Materials Focus: Income Opportunities

A June covered call on DOW at strike $52.00 using 300 shares is offering an income potential of $336. In July, a strike 52.50 covered call offers $336 and in September, a strike 52.50 covered call offers $675 in premium.

The annualized return by writing covered calls in June is 34.94%, in July is 15.76% and in September is 14.48%.

Chart for DOW

A June covered call on FCX at strike $11.50 using 300 shares is offering an income potential of $216. In July, a strike 12.00 covered call offers $261 and in August, a strike 12.00 covered call offers $366 in premium.

The annualized return by writing covered calls in June is 107.59%, in July is 59.47% and in August is 51.17%.

Chart for FCX


Utilities Focus: Income Opportunities

A June covered call on D at strike $72.50 using 300 shares is offering an income potential of $105. In July, a strike 72.50 covered call offers $270 and in October, a strike 72.50 covered call offers $555 in premium.

The annualized return by writing covered calls in June is 7.80%, in July is 9.11% and in October is 6.50%.

Chart for D

A June covered call on AEP at strike $65.00 using 300 shares is offering an income potential of $210. In July, a strike 65.00 covered call offers $360 and in August, a strike 65.00 covered call offers $480 in premium.

The annualized return by writing covered calls in June is 17.46%, in July is 13.60% and in August is 10.83%.

Chart for AEP


Telecommunications Focus: Income Opportunities

A June covered call on T at strike $39.00 using 300 shares is offering an income potential of $105. In July, a strike 39.00 covered call offers $177 and in August, a strike 39.00 covered call offers $234 in premium.

The annualized return by writing covered calls in June is 14.43%, in July is 11.04% and in August is 8.70%.

Chart for T

A June covered call on TMUS at strike $43.00 using 300 shares is offering an income potential of $231. In July, a strike 43.00 covered call offers $387 and in August, a strike 43.00 covered call offers $600 in premium.

The annualized return by writing covered calls in June is 29.19%, in July is 22.33% and in August is 20.89%.

Chart for TMUS

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

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