Income Alerts Newsletter for 06/02/2016

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 1.20% return, which annualizes at a rate of 19.07%.

Chart for QQQ

The DIA options at strike $178.00 for June 24 2016 are offering a 1.03% return, which annualizes at a rate of 16.33%.

Chart for DIA

The SPY options at strike $210.50 for June 24 2016 are offering a 0.95% return, which annualizes at a rate of 15.09%.

Chart for SPY


Technology Focus: Income Opportunities

A June covered call on QCOM at strike $55.00 using 300 shares is offering an income potential of $213. In July, a strike 55.00 covered call offers $402 and in August, a strike 55.00 covered call offers $690 in premium.

The annualized return by writing covered calls in June is 28.19%, in July is 20.33% and in August is 19.99%.

Chart for QCOM

A June covered call on AAPL at strike $98.50 using 300 shares is offering an income potential of $465. In July, a strike 100.00 covered call offers $618 and in August, a strike 100.00 covered call offers $1,095 in premium.

The annualized return by writing covered calls in June is 34.34%, in July is 17.33% and in August is 17.56%.

Chart for AAPL


Energy Focus: Income Opportunities

A June covered call on HES at strike $59.00 using 300 shares is offering an income potential of $468. In July, a strike 60.00 covered call offers $687 and in August, a strike 60.00 covered call offers $1,065 in premium.

The annualized return by writing covered calls in June is 58.39%, in July is 32.80% and in August is 29.25%.

Chart for HES

A June covered call on OXY at strike $75.50 using 300 shares is offering an income potential of $261. In July, a strike 77.50 covered call offers $309 and in August, a strike 77.50 covered call offers $528 in premium.

The annualized return by writing covered calls in June is 25.05%, in July is 11.23% and in August is 10.90%.

Chart for OXY


Healthcare Focus: Income Opportunities

A June covered call on GILD at strike $87.00 using 300 shares is offering an income potential of $357. In July, a strike 87.50 covered call offers $600 and in August, a strike 87.50 covered call offers $1,050 in premium.

The annualized return by writing covered calls in June is 29.92%, in July is 19.18% and in August is 19.22%.

Chart for GILD

A June covered call on MRK at strike $56.50 using 300 shares is offering an income potential of $165. In July, a strike 57.50 covered call offers $174 and in August, a strike 57.50 covered call offers $345 in premium.

The annualized return by writing covered calls in June is 21.17%, in July is 8.44% and in August is 9.51%.

Chart for MRK


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 $747 in premium.

The annualized return by writing covered calls in June is 23.14%, in July is 10.58% and in September is 8.68%.

Chart for PM

A June covered call on ADM at strike $43.00 using 300 shares is offering an income potential of $198. In July, a strike 43.00 covered call offers $366 and in August, a strike 43.00 covered call offers $636 in premium.

The annualized return by writing covered calls in June is 33.60%, in July is 23.78% and in August is 23.76%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A June covered call on DG at strike $91.00 using 300 shares is offering an income potential of $345. In July, a strike 92.50 covered call offers $435 and in August, a strike 92.50 covered call offers $705 in premium.

The annualized return by writing covered calls in June is 27.56%, in July is 13.17% and in August is 12.13%.

Chart for DG

A June covered call on FOXA at strike $29.50 using 300 shares is offering an income potential of $105. In July, a strike 30.00 covered call offers $135 and in October, a strike 30.00 covered call offers $345 in premium.

The annualized return by writing covered calls in June is 25.91%, in July is 12.63% and in October is 10.41%.

Chart for FOXA


Financials Focus: Income Opportunities

A June covered call on MET at strike $46.00 using 300 shares is offering an income potential of $225. In July, a strike 47.50 covered call offers $192 and in August, a strike 47.50 covered call offers $324 in premium.

The annualized return by writing covered calls in June is 35.76%, in July is 11.50% and in August is 11.02%.

Chart for MET

A June covered call on MS at strike $27.50 using 300 shares is offering an income potential of $171. In July, a strike 28.00 covered call offers $219 and in August, a strike 28.00 covered call offers $312 in premium.

The annualized return by writing covered calls in June is 45.46%, in July is 22.13% and in August is 17.94%.

Chart for MS


Industrials Focus: Income Opportunities

A June covered call on UNP at strike $84.50 using 300 shares is offering an income potential of $315. In July, a strike 85.00 covered call offers $573 and in August, a strike 85.00 covered call offers $873 in premium.

The annualized return by writing covered calls in June is 27.14%, in July is 18.85% and in August is 16.35%.

Chart for UNP

A June covered call on HTZ at strike $10.00 using 300 shares is offering an income potential of $105. In July, a strike 10.00 covered call offers $195 and in September, a strike 10.00 covered call offers $330 in premium.

The annualized return by writing covered calls in June is 78.77%, in July is 57.06% and in September is 42.29%.

Chart for HTZ


Materials Focus: Income Opportunities

A July covered call on HUN at strike $16.00 using 300 shares is offering an income potential of $105. In August, a strike 16.00 covered call offers $210 in premium.

The annualized return by writing covered calls in July is 19.00% and in August is 21.89%.

Chart for HUN

A June covered call on LYB at strike $85.00 using 300 shares is offering an income potential of $255. In July, a strike 85.00 covered call offers $600 and in September, a strike 85.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in June is 22.35%, in July is 20.15% and in September is 14.53%.

Chart for LYB


Utilities Focus: Income Opportunities

A June covered call on D at strike $72.50 using 300 shares is offering an income potential of $135. In July, a strike 72.50 covered call offers $315 and in October, a strike 72.50 covered call offers $615 in premium.

The annualized return by writing covered calls in June is 13.56%, in July is 12.06% and in October is 7.51%.

Chart for D

A June covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $150. In July, a strike 80.00 covered call offers $300 and in October, a strike 80.00 covered call offers $675 in premium.

The annualized return by writing covered calls in June is 13.67%, in July is 10.40% and in October is 7.48%.

Chart for DUK


Telecommunications Focus: Income Opportunities

A June covered call on TMUS at strike $43.00 using 300 shares is offering an income potential of $213. In July, a strike 43.00 covered call offers $381 and in August, a strike 43.00 covered call offers $597 in premium.

The annualized return by writing covered calls in June is 36.37%, in July is 24.91% and in August is 22.35%.

Chart for TMUS

A July covered call on VOD at strike $34.00 using 300 shares is offering an income potential of $150. In August, a strike 34.00 covered call offers $210 in premium.

The annualized return by writing covered calls in July is 12.22% and in August is 9.68%.

Chart for VOD

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

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