Income Alerts Newsletter for 06/07/2016

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 July 1 2016 are offering a 1.28% return, which annualizes at a rate of 18.74%.

Chart for QQQ

The DIA options at strike $179.50 for July 1 2016 are offering a 1.04% return, which annualizes at a rate of 15.15%.

Chart for DIA

The SPY options at strike $211.50 for July 1 2016 are offering a 1.03% return, which annualizes at a rate of 15.00%.

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 $198. In July, a strike 55.00 covered call offers $378 and in August, a strike 55.00 covered call offers $666 in premium.

The annualized return by writing covered calls in June is 37.02%, in July is 21.44% and in August is 20.51%.

Chart for QCOM

A June covered call on BABA at strike $78.50 using 300 shares is offering an income potential of $414. In July, a strike 80.00 covered call offers $558 and in August, a strike 80.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in June is 54.74%, in July is 22.27% and in August is 21.82%.

Chart for BABA


Energy Focus: Income Opportunities

A June covered call on HES at strike $60.50 using 300 shares is offering an income potential of $315. In July, a strike 62.50 covered call offers $477 and in August, a strike 62.50 covered call offers $870 in premium.

The annualized return by writing covered calls in June is 53.89%, in July is 24.71% and in August is 24.58%.

Chart for HES

A June covered call on OXY at strike $75.50 using 300 shares is offering an income potential of $192. In July, a strike 77.50 covered call offers $255 and in August, a strike 77.50 covered call offers $504 in premium.

The annualized return by writing covered calls in June is 26.04%, in July is 10.40% and in August is 11.09%.

Chart for OXY


Healthcare Focus: Income Opportunities

A June covered call on GILD at strike $88.00 using 300 shares is offering an income potential of $258. In July, a strike 90.00 covered call offers $378 and in August, a strike 90.00 covered call offers $810 in premium.

The annualized return by writing covered calls in June is 30.16%, in July is 13.32% and in August is 15.48%.

Chart for GILD

A June covered call on MRK at strike $57.50 using 300 shares is offering an income potential of $93. In July, a strike 57.50 covered call offers $237 and in August, a strike 57.50 covered call offers $414 in premium.

The annualized return by writing covered calls in June is 16.58%, in July is 12.79% and in August is 12.04%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A July covered call on KO at strike $46.00 using 300 shares is offering an income potential of $81. In August, a strike 46.00 covered call offers $198 in premium.

The annualized return by writing covered calls in July is 5.46% and in August is 7.18%.

Chart for KO

A June covered call on PEP at strike $103.00 using 300 shares is offering an income potential of $207. In July, a strike 105.00 covered call offers $210 and in October, a strike 105.00 covered call offers $675 in premium.

The annualized return by writing covered calls in June is 20.57%, in July is 6.26% and in October is 5.92%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A June covered call on DG at strike $91.00 using 300 shares is offering an income potential of $300. In July, a strike 92.50 covered call offers $420 and in August, a strike 92.50 covered call offers $720 in premium.

The annualized return by writing covered calls in June is 33.85%, in July is 14.28% and in August is 13.20%.

Chart for DG

A June covered call on FOXA at strike $29.50 using 300 shares is offering an income potential of $90. In July, a strike 30.00 covered call offers $135 and in October, a strike 30.00 covered call offers $360 in premium.

The annualized return by writing covered calls in June is 31.31%, in July is 14.16% and in October is 11.24%.

Chart for FOXA


Financials Focus: Income Opportunities

A June covered call on MET at strike $45.00 using 300 shares is offering an income potential of $174. In July, a strike 45.00 covered call offers $396 and in August, a strike 45.00 covered call offers $492 in premium.

The annualized return by writing covered calls in June is 39.90%, in July is 27.71% and in August is 18.50%.

Chart for MET

A June covered call on MS at strike $27.00 using 300 shares is offering an income potential of $120. In July, a strike 27.00 covered call offers $252 and in August, a strike 27.00 covered call offers $369 in premium.

The annualized return by writing covered calls in June is 46.00%, in July is 29.47% and in August is 23.36%.

Chart for MS


Industrials Focus: Income Opportunities

A June covered call on UNP at strike $87.00 using 300 shares is offering an income potential of $270. In July, a strike 87.50 covered call offers $561 and in August, a strike 87.50 covered call offers $816 in premium.

The annualized return by writing covered calls in June is 31.85%, in July is 20.08% and in August is 15.73%.

Chart for UNP

A June covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $75. In July, a strike 11.00 covered call offers $165 and in September, a strike 11.00 covered call offers $315 in premium.

The annualized return by writing covered calls in June is 72.28%, in July is 49.11% and in September is 38.28%.

Chart for HTZ


Materials Focus: Income Opportunities

A June covered call on CF at strike $31.50 using 300 shares is offering an income potential of $249. In July, a strike 35.00 covered call offers $147 and in August, a strike 35.00 covered call offers $303 in premium.

The annualized return by writing covered calls in June is 83.26%, in July is 14.58% and in August is 16.31%.

Chart for CF

A June covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $135. In July, a strike 110.00 covered call offers $420 and in August, a strike 110.00 covered call offers $810 in premium.

The annualized return by writing covered calls in June is 12.71%, in July is 11.97% and in August is 12.46%.

Chart for PPG


Utilities Focus: Income Opportunities

A July covered call on D at strike $75.00 using 300 shares is offering an income potential of $150. In October, a strike 75.00 covered call offers $420 in premium.

The annualized return by writing covered calls in July is 6.31% and in October is 5.19%.

Chart for D

A June covered call on DUK at strike $80.00 using 300 shares is offering an income potential of $210. In July, a strike 80.00 covered call offers $435 and in October, a strike 80.00 covered call offers $765 in premium.

The annualized return by writing covered calls in June is 26.90%, in July is 16.88% and in October is 8.73%.

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 $390 and in September, a strike 105.00 covered call offers $720 in premium.

The annualized return by writing covered calls in June is 8.96%, in July is 11.76% and in September is 8.53%.

Chart for SBAC

A June covered call on TMUS at strike $43.50 using 300 shares is offering an income potential of $159. In July, a strike 44.00 covered call offers $372 and in August, a strike 44.00 covered call offers $492 in premium.

The annualized return by writing covered calls in June is 37.90%, in July is 27.05% and in August is 19.26%.

Chart for TMUS

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

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