Income Alerts Newsletter for 05/31/2016

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 $110.50 for June 24 2016 are offering a 1.13% return, which annualizes at a rate of 16.49%.

Chart for QQQ

The DIA options at strike $179.00 for June 24 2016 are offering a 0.94% return, which annualizes at a rate of 13.71%.

Chart for DIA

The SPY options at strike $210.50 for June 24 2016 are offering a 0.98% return, which annualizes at a rate of 14.31%.

Chart for SPY


Technology Focus: Income Opportunities

A June covered call on QCOM at strike $55.50 using 300 shares is offering an income potential of $234. In July, a strike 57.50 covered call offers $174 and in August, a strike 57.50 covered call offers $414 in premium.

The annualized return by writing covered calls in June is 27.50%, in July is 8.24% and in August is 11.40%.

Chart for QCOM

A June covered call on BABA at strike $81.00 using 300 shares is offering an income potential of $627. In July, a strike 82.50 covered call offers $708 and in August, a strike 82.50 covered call offers $1,155 in premium.

The annualized return by writing covered calls in June is 50.90%, in July is 23.31% and in August is 22.22%.

Chart for BABA


Energy Focus: Income Opportunities

A June covered call on EOG at strike $82.00 using 300 shares is offering an income potential of $564. In July, a strike 82.50 covered call offers $891 and in October, a strike 82.50 covered call offers $1,725 in premium.

The annualized return by writing covered calls in June is 45.32%, in July is 29.34% and in October is 19.09%.

Chart for EOG

A June covered call on HAL at strike $43.00 using 300 shares is offering an income potential of $261. In July, a strike 43.00 covered call offers $456 and in August, a strike 43.00 covered call offers $651 in premium.

The annualized return by writing covered calls in June is 40.07%, in July is 28.75% and in August is 23.90%.

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 $207. In July, a strike 57.50 covered call offers $210 and in August, a strike 57.50 covered call offers $396 in premium.

The annualized return by writing covered calls in June is 23.76%, in July is 9.75% and in August is 10.65%.

Chart for MRK

A June covered call on PFE at strike $35.00 using 300 shares is offering an income potential of $81. In July, a strike 35.00 covered call offers $174 and in August, a strike 35.00 covered call offers $252 in premium.

The annualized return by writing covered calls in June is 15.10%, in July is 13.24% and in August is 11.07%.

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 $315. In July, a strike 100.00 covered call offers $378 and in September, a strike 100.00 covered call offers $774 in premium.

The annualized return by writing covered calls in June is 20.56%, in July is 9.99% and in September is 8.86%.

Chart for PM

A June covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $510. In July, a strike 160.00 covered call offers $1,230 and in October, a strike 160.00 covered call offers $2,280 in premium.

The annualized return by writing covered calls in June is 20.92%, in July is 20.71% and in October is 12.73%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A June covered call on CBS at strike $55.00 using 300 shares is offering an income potential of $288. In July, a strike 55.00 covered call offers $489 and in September, a strike 55.00 covered call offers $822 in premium.

The annualized return by writing covered calls in June is 34.21%, in July is 23.78% and in September is 17.44%.

Chart for CBS

A June covered call on CMCSA at strike $63.00 using 300 shares is offering an income potential of $258. In July, a strike 65.00 covered call offers $159 and in October, a strike 65.00 covered call offers $552 in premium.

The annualized return by writing covered calls in June is 26.64%, in July is 6.60% and in October is 7.59%.

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 $75. In July, a strike 15.00 covered call offers $132 and in August, a strike 15.00 covered call offers $198 in premium.

The annualized return by writing covered calls in June is 32.83%, in July is 23.66% and in August is 20.66%.

Chart for BAC

A June covered call on GS at strike $160.00 using 300 shares is offering an income potential of $840. In July, a strike 160.00 covered call offers $1,410 and in October, a strike 160.00 covered call offers $2,610 in premium.

The annualized return by writing covered calls in June is 34.32%, in July is 23.57% and in October is 14.52%.

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 $444. In July, a strike 85.00 covered call offers $453 and in August, a strike 85.00 covered call offers $774 in premium.

The annualized return by writing covered calls in June is 34.89%, in July is 14.40% and in August is 14.29%.

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 $240 in premium.

The annualized return by writing covered calls in June is 64.46%, in July is 30.57% and in September is 31.45%.

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 $300. In July, a strike 110.00 covered call offers $630 and in August, a strike 110.00 covered call offers $900 in premium.

The annualized return by writing covered calls in June is 17.85%, in July is 15.31% and in August is 12.65%.

Chart for PPG

A June covered call on DOW at strike $52.50 using 300 shares is offering an income potential of $216. In July, a strike 52.50 covered call offers $354 and in September, a strike 52.50 covered call offers $666 in premium.

The annualized return by writing covered calls in June is 26.88%, in July is 17.97% and in September is 14.74%.

Chart for DOW


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 $255 and in October, a strike 72.50 covered call offers $540 in premium.

The annualized return by writing covered calls in June is 9.44%, in July is 9.33% and in October is 6.49%.

Chart for D

A November covered call on AES at strike $12.00 using 300 shares is offering an income potential of $105.

The annualized return by writing covered calls in November is 6.86%.

Chart for AES


Telecommunications Focus: Income Opportunities

A June covered call on VZ at strike $51.00 using 300 shares is offering an income potential of $132. In July, a strike 52.50 covered call offers $72 and in August, a strike 52.50 covered call offers $153 in premium.

The annualized return by writing covered calls in June is 16.84%, in July is 3.70% and in August is 4.53%.

Chart for VZ

A June covered call on T at strike $39.00 using 300 shares is offering an income potential of $123. In July, a strike 39.00 covered call offers $186 and in August, a strike 39.00 covered call offers $252 in premium.

The annualized return by writing covered calls in June is 20.42%, in July is 12.55% and in August is 9.80%.

Chart for T

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

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