Income Alerts Newsletter for 06/15/2016

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 SPY options at strike $208.50 for July 8 2016 are offering a 1.34% return, which annualizes at a rate of 20.37%.

Chart for SPY


Technology Focus: Income Opportunities

A June covered call on BABA at strike $78.00 using 300 shares is offering an income potential of $255. In July, a strike 80.00 covered call offers $531 and in August, a strike 80.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in June is 100.84%, in July is 26.56% and in August is 24.91%.

Chart for BABA

A June covered call on PCLN at strike $1305.00 using 300 shares is offering an income potential of $3,090. In July, a strike 1305.00 covered call offers $10,530 and in August, a strike 1310.00 covered call offers $19,440 in premium.

The annualized return by writing covered calls in June is 72.64%, in July is 31.55% and in August is 28.49%.

Chart for PCLN


Energy Focus: Income Opportunities

A June covered call on CVX at strike $102.00 using 300 shares is offering an income potential of $162. In July, a strike 105.00 covered call offers $300 and in August, a strike 105.00 covered call offers $645 in premium.

The annualized return by writing covered calls in June is 48.91%, in July is 11.37% and in August is 11.82%.

Chart for CVX

A June covered call on EOG at strike $83.00 using 300 shares is offering an income potential of $231. In July, a strike 85.00 covered call offers $618 and in October, a strike 85.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in June is 85.47%, in July is 29.04% and in October is 17.24%.

Chart for EOG


Healthcare Focus: Income Opportunities

A July covered call on JNJ at strike $120.00 using 300 shares is offering an income potential of $219. In August, a strike 120.00 covered call offers $501 in premium.

The annualized return by writing covered calls in July is 7.15% and in August is 7.88%.

Chart for JNJ

A June covered call on MCK at strike $185.00 using 300 shares is offering an income potential of $135. In July, a strike 185.00 covered call offers $1,020 and in August, a strike 185.00 covered call offers $1,830 in premium.

The annualized return by writing covered calls in June is 22.67%, in July is 21.77% and in August is 18.94%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A June covered call on PEP at strike $104.00 using 300 shares is offering an income potential of $72. In July, a strike 105.00 covered call offers $324 and in October, a strike 105.00 covered call offers $822 in premium.

The annualized return by writing covered calls in June is 21.26%, in July is 12.06% and in October is 7.66%.

Chart for PEP

A June covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $105. In July, a strike 160.00 covered call offers $1,080 and in October, a strike 160.00 covered call offers $2,250 in premium.

The annualized return by writing covered calls in June is 20.37%, in July is 26.75% and in October is 14.07%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A June covered call on DG at strike $91.00 using 300 shares is offering an income potential of $210. In July, a strike 92.50 covered call offers $390 and in August, a strike 92.50 covered call offers $735 in premium.

The annualized return by writing covered calls in June is 71.07%, in July is 16.61% and in August is 15.14%.

Chart for DG

A June covered call on AMZN at strike $720.00 using 300 shares is offering an income potential of $1,410. In July, a strike 720.00 covered call offers $5,850 and in August, a strike 720.00 covered call offers $12,075 in premium.

The annualized return by writing covered calls in June is 60.02%, in July is 31.78% and in August is 32.29%.

Chart for AMZN


Industrials Focus: Income Opportunities

A June covered call on UNP at strike $88.00 using 300 shares is offering an income potential of $219. In July, a strike 90.00 covered call offers $420 and in August, a strike 90.00 covered call offers $774 in premium.

The annualized return by writing covered calls in June is 76.35%, in July is 18.44% and in August is 16.46%.

Chart for UNP

A July covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $105. In September, a strike 11.00 covered call offers $255 in premium.

The annualized return by writing covered calls in July is 40.12% and in September is 34.56%.

Chart for HTZ


Materials Focus: Income Opportunities

A July covered call on DOW at strike $52.50 using 300 shares is offering an income potential of $258. In September, a strike 52.50 covered call offers $630 in premium.

The annualized return by writing covered calls in July is 19.13% and in September is 16.13%.

Chart for DOW

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 26.97% and in August is 26.39%.

Chart for HUN


Utilities Focus: Income Opportunities

An August covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $90. In November, a strike 24.00 covered call offers $150 in premium.

The annualized return by writing covered calls in August is 7.18% and in November is 5.12%.

Chart for CNP

A July covered call on D at strike $75.00 using 300 shares is offering an income potential of $225. In October, a strike 75.00 covered call offers $540 in premium.

The annualized return by writing covered calls in July is 11.73% and in October is 7.03%.

Chart for D


Telecommunications Focus: Income Opportunities

A June covered call on TMUS at strike $42.50 using 300 shares is offering an income potential of $102. In July, a strike 43.00 covered call offers $285 and in August, a strike 43.00 covered call offers $543 in premium.

The annualized return by writing covered calls in June is 73.85%, in July is 26.17% and in August is 24.32%.

Chart for TMUS

A June covered call on VZ at strike $53.00 using 300 shares is offering an income potential of $96. In August, a strike 55.00 covered call offers $150 in premium.

The annualized return by writing covered calls in June is 55.44% and in August is 5.19%.

Chart for VZ

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

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