Income Alerts Newsletter for 06/03/2016

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 $111.00 for June 24 2016 are offering a 1.01% return, which annualizes at a rate of 16.82%.

Chart for QQQ

The DIA options at strike $178.50 for June 24 2016 are offering a 0.85% return, which annualizes at a rate of 14.17%.

Chart for DIA

The SPY options at strike $211.00 for June 24 2016 are offering a 0.83% return, which annualizes at a rate of 13.80%.

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 $174. In July, a strike 55.00 covered call offers $396 and in August, a strike 55.00 covered call offers $684 in premium.

The annualized return by writing covered calls in June is 24.37%, in July is 20.44% and in August is 20.03%.

Chart for QCOM

A June covered call on AAPL at strike $98.00 using 300 shares is offering an income potential of $408. In July, a strike 100.00 covered call offers $489 and in August, a strike 100.00 covered call offers $930 in premium.

The annualized return by writing covered calls in June is 32.20%, in July is 14.07% and in August is 15.14%.

Chart for AAPL


Energy Focus: Income Opportunities

A June covered call on HES at strike $59.50 using 300 shares is offering an income potential of $375. In July, a strike 60.00 covered call offers $699 and in August, a strike 60.00 covered call offers $1,065 in premium.

The annualized return by writing covered calls in June is 49.18%, in July is 33.97% and in August is 29.46%.

Chart for HES

A June covered call on OXY at strike $75.50 using 300 shares is offering an income potential of $222. In July, a strike 77.50 covered call offers $255 and in August, a strike 77.50 covered call offers $510 in premium.

The annualized return by writing covered calls in June is 22.67%, in July is 9.48% and in August is 10.68%.

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 $330. In July, a strike 87.50 covered call offers $543 and in August, a strike 87.50 covered call offers $945 in premium.

The annualized return by writing covered calls in June is 29.31%, in July is 17.68% and in August is 17.42%.

Chart for GILD

A June covered call on MRK at strike $57.00 using 300 shares is offering an income potential of $144. In July, a strike 57.50 covered call offers $210 and in August, a strike 57.50 covered call offers $384 in premium.

The annualized return by writing covered calls in June is 19.44%, in July is 10.35% and in August is 10.65%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A June covered call on WBA at strike $79.50 using 300 shares is offering an income potential of $282. In July, a strike 80.00 covered call offers $720 and in October, a strike 80.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in June is 27.44%, in July is 25.96% and in October is 14.78%.

Chart for WBA

A June covered call on PM at strike $99.50 using 300 shares is offering an income potential of $270. In July, a strike 100.00 covered call offers $339 and in September, a strike 100.00 covered call offers $711 in premium.

The annualized return by writing covered calls in June is 20.87%, in July is 9.55% and in September is 8.34%.

Chart for PM


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 29.23%, in July is 13.45% and in August is 12.26%.

Chart for DG

A July covered call on FOXA at strike $30.00 using 300 shares is offering an income potential of $165. In October, a strike 30.00 covered call offers $375 in premium.

The annualized return by writing covered calls in July is 15.73% and in October is 11.35%.

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 $183. In July, a strike 47.50 covered call offers $165 and in August, a strike 47.50 covered call offers $297 in premium.

The annualized return by writing covered calls in June is 30.86%, in July is 10.10% and in August is 10.23%.

Chart for MET

A June covered call on MS at strike $27.50 using 300 shares is offering an income potential of $132. In July, a strike 28.00 covered call offers $186 and in August, a strike 28.00 covered call offers $279 in premium.

The annualized return by writing covered calls in June is 37.40%, in July is 19.29% and in August is 16.31%.

Chart for MS


Industrials Focus: Income Opportunities

A June covered call on UNP at strike $85.00 using 300 shares is offering an income potential of $330. In July, a strike 85.00 covered call offers $588 and in August, a strike 85.00 covered call offers $900 in premium.

The annualized return by writing covered calls in June is 30.05%, in July is 19.67% and in August is 16.98%.

Chart for UNP

A June covered call on HTZ at strike $10.50 using 300 shares is offering an income potential of $90. In July, a strike 11.00 covered call offers $120 and in September, a strike 11.00 covered call offers $255 in premium.

The annualized return by writing covered calls in June is 68.51%, in July is 33.55% and in September is 30.72%.

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 $180. In July, a strike 110.00 covered call offers $480 and in August, a strike 110.00 covered call offers $705 in premium.

The annualized return by writing covered calls in June is 12.72%, in July is 12.45% and in August is 10.26%.

Chart for PPG

A July covered call on HUN at strike $16.00 using 300 shares is offering an income potential of $135. In August, a strike 16.00 covered call offers $210 in premium.

The annualized return by writing covered calls in July is 24.92% and in August is 21.96%.

Chart for HUN


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 $285 and in October, a strike 72.50 covered call offers $585 in premium.

The annualized return by writing covered calls in June is 11.22%, in July is 11.17% and in October is 7.21%.

Chart for D

A June covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $120. In July, a strike 80.00 covered call offers $300 and in October, a strike 80.00 covered call offers $645 in premium.

The annualized return by writing covered calls in June is 11.62%, in July is 10.64% and in October is 7.20%.

Chart for DUK


Telecommunications Focus: Income Opportunities

A June covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $90. In July, a strike 105.00 covered call offers $375 and in September, a strike 105.00 covered call offers $720 in premium.

The annualized return by writing covered calls in June is 6.75%, in July is 10.32% and in September is 8.24%.

Chart for SBAC

A June covered call on TMUS at strike $43.50 using 300 shares is offering an income potential of $201. In July, a strike 44.00 covered call offers $306 and in August, a strike 44.00 covered call offers $528 in premium.

The annualized return by writing covered calls in June is 35.95%, in July is 20.06% and in August is 19.63%.

Chart for TMUS

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

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