Income Alerts Newsletter for 06/17/2016

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 DIA options at strike $177.50 for July 8 2016 are offering a 1.34% return, which annualizes at a rate of 22.27%.

Chart for DIA

The SPY options at strike $208.50 for July 8 2016 are offering a 1.33% return, which annualizes at a rate of 22.11%.

Chart for SPY


Technology Focus: Income Opportunities

A July covered call on QCOM at strike $55.00 using 300 shares is offering an income potential of $159. In August, a strike 55.00 covered call offers $441 in premium.

The annualized return by writing covered calls in July is 12.19% and in August is 15.89%.

Chart for QCOM

A June covered call on BABA at strike $78.50 using 300 shares is offering an income potential of $123. In July, a strike 80.00 covered call offers $486 and in August, a strike 80.00 covered call offers $990 in premium.

The annualized return by writing covered calls in June is 96.10%, in July is 25.71% and in August is 24.72%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on CVX at strike $105.00 using 300 shares is offering an income potential of $243. In August, a strike 105.00 covered call offers $543 in premium.

The annualized return by writing covered calls in July is 9.83% and in August is 10.24%.

Chart for CVX

A June covered call on EOG at strike $80.50 using 300 shares is offering an income potential of $132. In July, a strike 82.50 covered call offers $561 and in October, a strike 82.50 covered call offers $1,335 in premium.

The annualized return by writing covered calls in June is 100.88%, in July is 29.11% and in October is 16.79%.

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 $180. In August, a strike 120.00 covered call offers $450 in premium.

The annualized return by writing covered calls in July is 6.29% and in August is 7.32%.

Chart for JNJ

A June covered call on MCK at strike $180.00 using 300 shares is offering an income potential of $225. In July, a strike 180.00 covered call offers $1,350 and in August, a strike 180.00 covered call offers $2,970 in premium.

The annualized return by writing covered calls in June is 76.47%, in July is 31.24% and in August is 32.73%.

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 $75. In July, a strike 105.00 covered call offers $405 and in October, a strike 105.00 covered call offers $915 in premium.

The annualized return by writing covered calls in June is 44.04%, in July is 16.02% and in October is 8.63%.

Chart for PEP

A July covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $960. In October, a strike 160.00 covered call offers $2,130 in premium.

The annualized return by writing covered calls in July is 25.35% and in October is 13.53%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A June covered call on CBS at strike $54.50 using 300 shares is offering an income potential of $72. In July, a strike 55.00 covered call offers $357 and in September, a strike 55.00 covered call offers $759 in premium.

The annualized return by writing covered calls in June is 80.75%, in July is 27.17% and in September is 19.11%.

Chart for CBS

A June covered call on DG at strike $91.00 using 300 shares is offering an income potential of $105. In July, a strike 92.50 covered call offers $390 and in August, a strike 92.50 covered call offers $750 in premium.

The annualized return by writing covered calls in June is 70.61%, in July is 17.67% and in August is 15.90%.

Chart for DG


Industrials Focus: Income Opportunities

A June covered call on UNP at strike $87.50 using 300 shares is offering an income potential of $75. In July, a strike 87.50 covered call offers $618 and in August, a strike 87.50 covered call offers $1,005 in premium.

The annualized return by writing covered calls in June is 52.54%, in July is 29.48% and in August is 22.46%.

Chart for UNP

A July covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $120. In September, a strike 11.00 covered call offers $270 in premium.

The annualized return by writing covered calls in July is 48.42% and in September is 36.99%.

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 $237. In September, a strike 52.50 covered call offers $639 in premium.

The annualized return by writing covered calls in July is 18.70% and in September is 16.70%.

Chart for DOW

A July covered call on HUN at strike $16.00 using 300 shares is offering an income potential of $90. In August, a strike 16.00 covered call offers $225 in premium.

The annualized return by writing covered calls in July is 24.32% and in August is 28.93%.

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 $75. In November, a strike 24.00 covered call offers $150 in premium.

The annualized return by writing covered calls in August is 6.16% and in November is 5.19%.

Chart for CNP

A July covered call on D at strike $75.00 using 300 shares is offering an income potential of $240. In October, a strike 75.00 covered call offers $585 in premium.

The annualized return by writing covered calls in July is 13.32% and in October is 7.73%.

Chart for D


Telecommunications Focus: Income Opportunities

A July covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $285. In September, a strike 105.00 covered call offers $720 in premium.

The annualized return by writing covered calls in July is 11.62% and in September is 9.61%.

Chart for SBAC

A July covered call on TMUS at strike $42.00 using 300 shares is offering an income potential of $327. In August, a strike 42.00 covered call offers $591 in premium.

The annualized return by writing covered calls in July is 32.61% and in August is 27.80%.

Chart for TMUS

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

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