Income Alerts Newsletter for 06/23/2016

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 $178.00 for July 16 2016 are offering a 1.53% return, which annualizes at a rate of 23.22%.

Chart for DIA

The SPY options at strike $208.50 for July 16 2016 are offering a 1.73% return, which annualizes at a rate of 26.32%.

Chart for SPY


Technology Focus: Income Opportunities

A July covered call on QCOM at strike $54.50 using 300 shares is offering an income potential of $288. In August, a strike 55.00 covered call offers $519 and in September, a strike 55.00 covered call offers $579 in premium.

The annualized return by writing covered calls in July is 27.51%, in August is 20.46% and in September is 15.54%.

Chart for QCOM

A July covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $573. In August, a strike 80.00 covered call offers $930 and in October, a strike 80.00 covered call offers $1,275 in premium.

The annualized return by writing covered calls in July is 37.81%, in August is 25.36% and in October is 17.07%.

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 $600 and in September, a strike 45.00 covered call offers $705 in premium.

The annualized return by writing covered calls in July is 40.20%, in August is 29.00% and in September is 23.30%.

Chart for HAL

A July covered call on HES at strike $59.00 using 300 shares is offering an income potential of $534. In August, a strike 60.00 covered call offers $807 and in September, a strike 60.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in July is 48.13%, in August is 30.08% and in September is 26.12%.

Chart for HES


Healthcare Focus: Income Opportunities

A July covered call on MCK at strike $185.00 using 300 shares is offering an income potential of $765. In August, a strike 185.00 covered call offers $1,620 and in November, a strike 185.00 covered call offers $2,370 in premium.

The annualized return by writing covered calls in July is 21.67%, in August is 18.97% and in November is 11.07%.

Chart for MCK

A July covered call on MRK at strike $57.50 using 300 shares is offering an income potential of $258. In August, a strike 57.50 covered call offers $441 and in October, a strike 57.50 covered call offers $618 in premium.

The annualized return by writing covered calls in July is 23.28%, in August is 16.37% and in October is 11.21%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A July covered call on PEP at strike $104.00 using 300 shares is offering an income potential of $486. In August, a strike 105.00 covered call offers $588 and in October, a strike 105.00 covered call offers $828 in premium.

The annualized return by writing covered calls in July is 24.13%, in August is 11.91% and in October is 8.18%.

Chart for PEP

A July covered call on PM at strike $102.00 using 300 shares is offering an income potential of $366. In August, a strike 105.00 covered call offers $261 and in September, a strike 105.00 covered call offers $381 in premium.

The annualized return by writing covered calls in July is 18.59%, in August is 5.37% and in September is 5.34%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A July covered call on CMCSA at strike $63.00 using 300 shares is offering an income potential of $276. In August, a strike 65.00 covered call offers $276 and in October, a strike 65.00 covered call offers $483 in premium.

The annualized return by writing covered calls in July is 22.67%, in August is 9.22% and in October is 7.89%.

Chart for CMCSA

A July covered call on DG at strike $92.00 using 300 shares is offering an income potential of $525. In August, a strike 92.50 covered call offers $825 and in November, a strike 92.50 covered call offers $1,410 in premium.

The annualized return by writing covered calls in July is 29.51%, in August is 19.07% and in November is 13.11%.

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 $258. In August, a strike 27.00 covered call offers $288 and in September, a strike 27.00 covered call offers $342 in premium.

The annualized return by writing covered calls in July is 51.23%, in August is 23.35% and in September is 18.94%.

Chart for MS


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $87.50 using 300 shares is offering an income potential of $606. In August, a strike 87.50 covered call offers $1,035 and in November, a strike 87.50 covered call offers $1,485 in premium.

The annualized return by writing covered calls in July is 35.94%, in August is 25.40% and in November is 14.59%.

Chart for UNP

A July covered call on UTX at strike $102.00 using 300 shares is offering an income potential of $399. In August, a strike 105.00 covered call offers $330 and in November, a strike 105.00 covered call offers $762 in premium.

The annualized return by writing covered calls in July is 20.22%, in August is 6.79% and in November is 6.26%.

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 $135. In August, a strike 16.00 covered call offers $255 and in November, a strike 16.00 covered call offers $420 in premium.

The annualized return by writing covered calls in July is 44.97%, in August is 35.48% and in November is 23.87%.

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 $1,110 and in October, a strike 110.00 covered call offers $1,545 in premium.

The annualized return by writing covered calls in July is 47.57%, in August is 22.12% and in October is 15.10%.

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 $195. In August, a strike 75.00 covered call offers $420 and in October, a strike 75.00 covered call offers $630 in premium.

The annualized return by writing covered calls in July is 13.52%, in August is 11.96% and in October is 8.76%.

Chart for D

A July covered call on DUK at strike $82.50 using 300 shares is offering an income potential of $285. In August, a strike 82.50 covered call offers $495 and in October, a strike 82.50 covered call offers $705 in premium.

The annualized return by writing covered calls in July is 17.86%, in August is 12.73% and in October is 8.85%.

Chart for DUK


Telecommunications Focus: Income Opportunities

A July covered call on CTL at strike $28.00 using 300 shares is offering an income potential of $210. In August, a strike 28.00 covered call offers $360 and in October, a strike 28.00 covered call offers $435 in premium.

The annualized return by writing covered calls in July is 39.11%, in August is 27.78% and in October is 16.39%.

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 $1,020 and in December, a strike 105.00 covered call offers $1,530 in premium.

The annualized return by writing covered calls in July is 15.68%, in September is 14.34% and in December is 10.69%.

Chart for SBAC

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

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