Income Alerts Newsletter for 06/24/2016

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 $109.00 for July 16 2016 are offering a 1.51% return, which annualizes at a rate of 23.99%.

Chart for QQQ

The DIA options at strike $180.00 for July 16 2016 are offering a 1.07% return, which annualizes at a rate of 16.95%.

Chart for DIA

The SPY options at strike $211.00 for July 16 2016 are offering a 1.39% return, which annualizes at a rate of 21.98%.

Chart for SPY


Technology Focus: Income Opportunities

A July covered call on QCOM at strike $56.00 using 300 shares is offering an income potential of $240. In August, a strike 57.50 covered call offers $342 and in September, a strike 57.50 covered call offers $405 in premium.

The annualized return by writing covered calls in July is 23.19%, in August is 13.19% and in September is 10.57%.

Chart for QCOM

A July covered call on BABA at strike $79.50 using 300 shares is offering an income potential of $510. 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 34.84%, in August is 25.66% and in October is 18.19%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on HAL at strike $46.00 using 300 shares is offering an income potential of $327. In August, a strike 46.00 covered call offers $603 and in September, a strike 46.00 covered call offers $708 in premium.

The annualized return by writing covered calls in July is 38.65%, in August is 28.86% and in September is 23.04%.

Chart for HAL

A July covered call on HES at strike $60.00 using 300 shares is offering an income potential of $555. In August, a strike 60.00 covered call offers $1,020 and in September, a strike 60.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in July is 50.69%, in August is 37.96% and in September is 25.60%.

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 $885. In August, a strike 185.00 covered call offers $1,770 and in November, a strike 185.00 covered call offers $2,370 in premium.

The annualized return by writing covered calls in July is 25.86%, in August is 20.85% and in November is 10.99%.

Chart for MCK

A July covered call on MRK at strike $58.00 using 300 shares is offering an income potential of $219. In August, a strike 60.00 covered call offers $165 and in October, a strike 60.00 covered call offers $324 in premium.

The annualized return by writing covered calls in July is 20.34%, in August is 6.06% and in October is 5.76%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A July covered call on STZ at strike $160.00 using 300 shares is offering an income potential of $690. In August, a strike 160.00 covered call offers $1,080 and in October, a strike 160.00 covered call offers $1,830 in premium.

The annualized return by writing covered calls in July is 23.75%, in August is 14.87% and in October is 12.28%.

Chart for STZ

A July covered call on KO at strike $45.50 using 300 shares is offering an income potential of $105. In August, a strike 46.00 covered call offers $174 and in September, a strike 46.00 covered call offers $213 in premium.

The annualized return by writing covered calls in July is 12.42%, in August is 8.20% and in September is 6.79%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

A July covered call on GM at strike $30.00 using 300 shares is offering an income potential of $165. In August, a strike 30.00 covered call offers $306 and in September, a strike 30.00 covered call offers $366 in premium.

The annualized return by writing covered calls in July is 29.82%, in August is 22.29% and in September is 18.10%.

Chart for GM

A July covered call on FOXA at strike $29.50 using 300 shares is offering an income potential of $105. In August, a strike 30.00 covered call offers $165 and in October, a strike 30.00 covered call offers $270 in premium.

The annualized return by writing covered calls in July is 19.25%, in August is 12.08% and in October is 9.59%.

Chart for FOXA


Financials Focus: Income Opportunities

An August covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $72. In September, a strike 15.00 covered call offers $90 in premium.

The annualized return by writing covered calls in August is 10.94% and in September is 9.27%.

Chart for BAC

A July covered call on GS at strike $155.00 using 300 shares is offering an income potential of $885. In August, a strike 155.00 covered call offers $1,395 and in October, a strike 155.00 covered call offers $2,085 in premium.

The annualized return by writing covered calls in July is 31.27%, in August is 19.77% and in October is 14.39%.

Chart for GS


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $89.00 using 300 shares is offering an income potential of $378. In August, a strike 90.00 covered call offers $711 and in November, a strike 90.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in July is 22.91%, in August is 17.31% and in November is 11.44%.

Chart for UNP

A July covered call on UTX at strike $103.00 using 300 shares is offering an income potential of $333. In August, a strike 105.00 covered call offers $375 and in November, a strike 105.00 covered call offers $810 in premium.

The annualized return by writing covered calls in July is 17.40%, in August is 7.78% and in November is 6.64%.

Chart for UTX


Materials Focus: Income Opportunities

A July covered call on PPG at strike $115.00 using 300 shares is offering an income potential of $165. In August, a strike 115.00 covered call offers $465 and in November, a strike 115.00 covered call offers $960 in premium.

The annualized return by writing covered calls in July is 7.89%, in August is 8.89% and in November is 7.26%.

Chart for PPG

An August covered call on HUN at strike $17.00 using 300 shares is offering an income potential of $180. In November, a strike 17.00 covered call offers $360 in premium.

The annualized return by writing covered calls in August is 24.13% and in November is 19.53%.

Chart for HUN


Utilities Focus: Income Opportunities

A July covered call on D at strike $75.00 using 300 shares is offering an income potential of $165. In August, a strike 75.00 covered call offers $390 and in October, a strike 75.00 covered call offers $525 in premium.

The annualized return by writing covered calls in July is 11.89%, in August is 11.26% and in October is 7.31%.

Chart for D

A July covered call on DUK at strike $82.50 using 300 shares is offering an income potential of $240. In August, a strike 82.50 covered call offers $435 and in October, a strike 82.50 covered call offers $675 in premium.

The annualized return by writing covered calls in July is 15.63%, in August is 11.32% and in October is 8.51%.

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 $105. In August, a strike 29.00 covered call offers $270 and in October, a strike 29.00 covered call offers $300 in premium.

The annualized return by writing covered calls in July is 19.72%, in August is 20.51% and in October is 10.96%.

Chart for CTL

A July covered call on VOD at strike $32.50 using 300 shares is offering an income potential of $210. In August, a strike 33.00 covered call offers $279 and in September, a strike 33.00 covered call offers $339 in premium.

The annualized return by writing covered calls in July is 34.97%, in August is 18.56% and in September is 15.30%.

Chart for VOD

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

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