Income Alerts Newsletter for 06/08/2016

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 1.20% return, which annualizes at a rate of 18.30%.

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 15.85%.

Chart for DIA

The SPY options at strike $212.00 for June 30 2016 are offering a 0.86% return, which annualizes at a rate of 13.69%.

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 $156. In July, a strike 55.00 covered call offers $366 and in August, a strike 55.00 covered call offers $663 in premium.

The annualized return by writing covered calls in June is 31.76%, in July is 21.29% and in August is 20.71%.

Chart for QCOM

A June covered call on BABA at strike $78.00 using 300 shares is offering an income potential of $453. In July, a strike 80.00 covered call offers $495 and in August, a strike 80.00 covered call offers $930 in premium.

The annualized return by writing covered calls in June is 65.64%, in July is 20.27% and in August is 20.46%.

Chart for BABA


Energy Focus: Income Opportunities

A June covered call on SLB at strike $80.50 using 300 shares is offering an income potential of $267. In July, a strike 82.50 covered call offers $330 and in August, a strike 82.50 covered call offers $645 in premium.

The annualized return by writing covered calls in June is 37.28%, in July is 13.03% and in August is 13.60%.

Chart for SLB

A June covered call on APC at strike $55.50 using 300 shares is offering an income potential of $399. In July, a strike 57.50 covered call offers $516 and in August, a strike 57.50 covered call offers $792 in premium.

The annualized return by writing covered calls in June is 81.89%, in July is 30.09% and in August is 24.77%.

Chart for APC


Healthcare Focus: Income Opportunities

A July covered call on PFE at strike $35.00 using 300 shares is offering an income potential of $198. In August, a strike 35.00 covered call offers $252 in premium.

The annualized return by writing covered calls in July is 18.07% and in August is 12.19%.

Chart for PFE

A June covered call on ESRX at strike $76.00 using 300 shares is offering an income potential of $246. In July, a strike 77.50 covered call offers $330 and in August, a strike 77.50 covered call offers $645 in premium.

The annualized return by writing covered calls in June is 36.27%, in July is 13.77% and in August is 14.39%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

A June covered call on WBA at strike $79.50 using 300 shares is offering an income potential of $234. In July, a strike 80.00 covered call offers $699 and in October, a strike 80.00 covered call offers $1,215 in premium.

The annualized return by writing covered calls in June is 33.04%, in July is 28.40% and in October is 14.37%.

Chart for WBA

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 $189 in premium.

The annualized return by writing covered calls in July is 5.61% and in August is 6.95%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

A June covered call on AMZN at strike $725.00 using 300 shares is offering an income potential of $2,835. In July, a strike 725.00 covered call offers $6,285 and in August, a strike 725.00 covered call offers $12,270 in premium.

The annualized return by writing covered calls in June is 43.90%, in July is 27.90% and in August is 29.54%.

Chart for AMZN

A June covered call on CMCSA at strike $63.50 using 300 shares is offering an income potential of $180. In July, a strike 65.00 covered call offers $135 and in October, a strike 65.00 covered call offers $552 in premium.

The annualized return by writing covered calls in June is 31.78%, in July is 6.71% and in October is 7.98%.

Chart for CMCSA


Financials Focus: Income Opportunities

An August covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $123.

The annualized return by writing covered calls in August is 14.51%.

Chart for BAC

A June covered call on JPM at strike $65.50 using 300 shares is offering an income potential of $162. In July, a strike 67.50 covered call offers $195 and in August, a strike 67.50 covered call offers $306 in premium.

The annualized return by writing covered calls in June is 27.77%, in July is 9.44% and in August is 7.86%.

Chart for JPM


Industrials Focus: Income Opportunities

A June covered call on UNP at strike $88.00 using 300 shares is offering an income potential of $240. In July, a strike 90.00 covered call offers $321 and in August, a strike 90.00 covered call offers $666 in premium.

The annualized return by writing covered calls in June is 30.59%, in July is 11.58% and in August is 12.83%.

Chart for UNP

A June covered call on HTZ at strike $11.50 using 300 shares is offering an income potential of $90. In July, a strike 12.00 covered call offers $135 and in September, a strike 12.00 covered call offers $285 in premium.

The annualized return by writing covered calls in June is 89.68%, in July is 38.46% and in September is 32.53%.

Chart for HTZ


Materials Focus: Income Opportunities

A June covered call on CF at strike $32.00 using 300 shares is offering an income potential of $273. In July, a strike 35.00 covered call offers $204 and in August, a strike 35.00 covered call offers $378 in premium.

The annualized return by writing covered calls in June is 97.25%, in July is 20.35% and in August is 20.24%.

Chart for CF

A June covered call on LYB at strike $82.50 using 300 shares is offering an income potential of $360. In July, a strike 82.50 covered call offers $780 and in September, a strike 82.50 covered call offers $1,260 in premium.

The annualized return by writing covered calls in June is 49.09%, in July is 30.53% and in September is 19.24%.

Chart for LYB


Utilities Focus: Income Opportunities

A June covered call on ED at strike $75.00 using 300 shares is offering an income potential of $180. In July, a strike 75.00 covered call offers $405 and in August, a strike 75.00 covered call offers $570 in premium.

The annualized return by writing covered calls in June is 26.89%, in July is 17.24% and in August is 12.88%.

Chart for ED

A July covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $165. In August, a strike 67.50 covered call offers $285 in premium.

The annualized return by writing covered calls in July is 7.88% and in August is 7.22%.

Chart for AEP


Telecommunications Focus: Income Opportunities

A June covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $270. In July, a strike 105.00 covered call offers $630 and in September, a strike 105.00 covered call offers $720 in premium.

The annualized return by writing covered calls in June is 28.85%, in July is 19.21% and in September is 8.42%.

Chart for SBAC

A July covered call on VOD at strike $35.00 using 300 shares is offering an income potential of $75. In August, a strike 35.00 covered call offers $138 in premium.

The annualized return by writing covered calls in July is 6.90% and in August is 6.73%.

Chart for VOD

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

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