Income Alerts Newsletter for 06/22/2016

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 $178.50 for July 16 2016 are offering a 1.37% return, which annualizes at a rate of 19.95%.

Chart for DIA

The SPY options at strike $208.50 for July 16 2016 are offering a 1.61% return, which annualizes at a rate of 23.56%.

Chart for SPY


Technology Focus: Income Opportunities

A July covered call on QCOM at strike $54.00 using 300 shares is offering an income potential of $300. In August, a strike 55.00 covered call offers $483 and in September, a strike 55.00 covered call offers $540 in premium.

The annualized return by writing covered calls in July is 27.61%, in August is 18.74% and in September is 14.34%.

Chart for QCOM

A July covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $552. In August, a strike 80.00 covered call offers $930 and in October, a strike 80.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in July is 34.99%, in August is 24.97% and in October is 18.02%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on HAL at strike $45.00 using 300 shares is offering an income potential of $345. In August, a strike 45.00 covered call offers $573 and in September, a strike 45.00 covered call offers $678 in premium.

The annualized return by writing covered calls in July is 38.62%, in August is 27.20% and in September is 22.13%.

Chart for HAL

A July covered call on HES at strike $60.00 using 300 shares is offering an income potential of $438. In August, a strike 60.00 covered call offers $900 and in September, a strike 60.00 covered call offers $1,095 in premium.

The annualized return by writing covered calls in July is 37.24%, in August is 32.76% and in September is 27.50%.

Chart for HES


Healthcare Focus: Income Opportunities

A July covered call on MCK at strike $180.00 using 300 shares is offering an income potential of $1,110. In August, a strike 180.00 covered call offers $1,980 and in November, a strike 180.00 covered call offers $3,240 in premium.

The annualized return by writing covered calls in July is 30.77%, in August is 23.25% and in November is 15.50%.

Chart for MCK

A July covered call on MRK at strike $56.50 using 300 shares is offering an income potential of $291. In August, a strike 57.50 covered call offers $318 and in October, a strike 57.50 covered call offers $492 in premium.

The annualized return by writing covered calls in July is 25.62%, in August is 11.68% and in October is 8.91%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A July covered call on KO at strike $45.50 using 300 shares is offering an income potential of $132. In August, a strike 46.00 covered call offers $210 and in September, a strike 46.00 covered call offers $258 in premium.

The annualized return by writing covered calls in July is 14.37%, in August is 9.58% and in September is 8.06%.

Chart for KO

A July covered call on PEP at strike $105.00 using 300 shares is offering an income potential of $360. In August, a strike 105.00 covered call offers $621 and in October, a strike 105.00 covered call offers $897 in premium.

The annualized return by writing covered calls in July is 17.03%, in August is 12.34% and in October is 8.78%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A July covered call on CMCSA at strike $63.00 using 300 shares is offering an income potential of $234. In August, a strike 65.00 covered call offers $249 and in October, a strike 65.00 covered call offers $459 in premium.

The annualized return by writing covered calls in July is 18.44%, in August is 8.18% and in October is 7.44%.

Chart for CMCSA

A July covered call on DG at strike $91.50 using 300 shares is offering an income potential of $540. In August, a strike 92.50 covered call offers $735 and in November, a strike 92.50 covered call offers $1,440 in premium.

The annualized return by writing covered calls in July is 29.31%, in August is 16.74% and in November is 13.39%.

Chart for DG


Financials Focus: Income Opportunities

A July covered call on MS at strike $26.50 using 300 shares is offering an income potential of $207. In August, a strike 27.00 covered call offers $255 and in September, a strike 27.00 covered call offers $318 in premium.

The annualized return by writing covered calls in July is 39.49%, in August is 20.40% and in September is 17.49%.

Chart for MS

A July covered call on JPM at strike $63.00 using 300 shares is offering an income potential of $378. In August, a strike 65.00 covered call offers $315 and in September, a strike 65.00 covered call offers $417 in premium.

The annualized return by writing covered calls in July is 29.82%, in August is 10.32% and in September is 9.37%.

Chart for JPM


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $88.00 using 300 shares is offering an income potential of $555. In August, a strike 90.00 covered call offers $645 and in November, a strike 90.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in July is 31.48%, in August is 15.30% and in November is 10.95%.

Chart for UNP

A July covered call on UTX at strike $102.00 using 300 shares is offering an income potential of $414. In August, a strike 105.00 covered call offers $345 and in November, a strike 105.00 covered call offers $774 in premium.

The annualized return by writing covered calls in July is 20.11%, in August is 6.97% and in November is 6.30%.

Chart for UTX


Materials Focus: Income Opportunities

A July covered call on HUN at strike $16.00 using 300 shares is offering an income potential of $120. In August, a strike 16.00 covered call offers $240 and in November, a strike 16.00 covered call offers $420 in premium.

The annualized return by writing covered calls in July is 38.37%, in August is 32.84% and in November is 23.80%.

Chart for HUN

A July covered call on MON at strike $108.00 using 300 shares is offering an income potential of $975. In August, a strike 110.00 covered call offers $1,245 and in October, a strike 110.00 covered call offers $1,650 in premium.

The annualized return by writing covered calls in July is 45.44%, in August is 24.39% and in October is 15.97%.

Chart for MON


Utilities Focus: Income Opportunities

A July covered call on D at strike $75.00 using 300 shares is offering an income potential of $270. In August, a strike 75.00 covered call offers $480 and in October, a strike 75.00 covered call offers $630 in premium.

The annualized return by writing covered calls in July is 17.89%, in August is 13.38% and in October is 8.63%.

Chart for D

A July covered call on DUK at strike $82.50 using 300 shares is offering an income potential of $315. In August, a strike 82.50 covered call offers $555 and in October, a strike 82.50 covered call offers $765 in premium.

The annualized return by writing covered calls in July is 18.94%, in August is 14.04% and in October is 9.52%.

Chart for DUK


Telecommunications Focus: Income Opportunities

A July covered call on CTL at strike $29.00 using 300 shares is offering an income potential of $75. In August, a strike 29.00 covered call offers $225 and in October, a strike 29.00 covered call offers $300 in premium.

The annualized return by writing covered calls in July is 13.12%, in August is 16.69% and in October is 10.96%.

Chart for CTL

A July covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $315. In September, a strike 105.00 covered call offers $720 and in December, a strike 105.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in July is 15.09%, in September is 9.93% and in December is 10.00%.

Chart for SBAC

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

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