Income Alerts Newsletter for 06/21/2016

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 $123.00 for August 20 2016 are offering a 0.01% return, which annualizes at a rate of 0.06%.

Chart for QQQ

The DIA options at strike $178.00 for July 16 2016 are offering a 1.39% return, which annualizes at a rate of 19.53%.

Chart for DIA

The SPY options at strike $208.00 for July 16 2016 are offering a 1.69% return, which annualizes at a rate of 23.76%.

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 $312. In August, a strike 55.00 covered call offers $447 and in September, a strike 55.00 covered call offers $507 in premium.

The annualized return by writing covered calls in July is 27.63%, in August is 17.01% and in September is 13.28%.

Chart for QCOM

A July covered call on BABA at strike $78.50 using 300 shares is offering an income potential of $588. In August, a strike 80.00 covered call offers $897 and in October, a strike 80.00 covered call offers $1,275 in premium.

The annualized return by writing covered calls in July is 36.11%, in August is 23.80% and in October is 16.93%.

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 $252. In August, a strike 105.00 covered call offers $618 and in September, a strike 105.00 covered call offers $750 in premium.

The annualized return by writing covered calls in July is 11.59%, in August is 12.26% and in September is 10.24%.

Chart for CVX

A July covered call on EOG at strike $85.00 using 300 shares is offering an income potential of $468. In October, a strike 85.00 covered call offers $1,425 and in January, a strike 85.00 covered call offers $2,160 in premium.

The annualized return by writing covered calls in July is 26.83%, in October is 17.82% and in January is 16.09%.

Chart for EOG


Healthcare Focus: Income Opportunities

A July covered call on HCA at strike $79.00 using 300 shares is offering an income potential of $465. In August, a strike 80.00 covered call offers $690 and in September, a strike 80.00 covered call offers $870 in premium.

The annualized return by writing covered calls in July is 28.25%, in August is 18.04% and in September is 15.72%.

Chart for HCA

A July covered call on JNJ at strike $117.00 using 300 shares is offering an income potential of $426. In August, a strike 120.00 covered call offers $330 and in September, a strike 120.00 covered call offers $459 in premium.

The annualized return by writing covered calls in July is 17.32%, in August is 5.70% and in September is 5.46%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

A July covered call on PEP at strike $104.00 using 300 shares is offering an income potential of $414. In August, a strike 105.00 covered call offers $525 and in October, a strike 105.00 covered call offers $771 in premium.

The annualized return by writing covered calls in July is 19.00%, in August is 10.30% and in October is 7.50%.

Chart for PEP

A July covered call on WBA at strike $83.00 using 300 shares is offering an income potential of $846. In August, a strike 85.00 covered call offers $777 and in October, a strike 85.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in July is 49.42%, in August is 19.29% and in October is 13.94%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A July covered call on CBS at strike $55.00 using 300 shares is offering an income potential of $270. In August, a strike 55.00 covered call offers $549 and in September, a strike 55.00 covered call offers $672 in premium.

The annualized return by writing covered calls in July is 23.79%, in August is 20.98% and in September is 17.74%.

Chart for CBS

A July covered call on DG at strike $91.50 using 300 shares is offering an income potential of $480. In August, a strike 92.50 covered call offers $705 and in November, a strike 92.50 covered call offers $1,350 in premium.

The annualized return by writing covered calls in July is 25.13%, in August is 15.87% and in November is 12.50%.

Chart for DG


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $88.50 using 300 shares is offering an income potential of $504. In August, a strike 90.00 covered call offers $696 and in November, a strike 90.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in July is 27.29%, in August is 16.19% and in November is 11.42%.

Chart for UNP

A July covered call on HTZ at strike $12.00 using 300 shares is offering an income potential of $75. In September, a strike 12.00 covered call offers $225 and in December, a strike 12.00 covered call offers $375 in premium.

The annualized return by writing covered calls in July is 32.41%, in September is 29.78% and in December is 25.79%.

Chart for HTZ


Materials Focus: Income Opportunities

A July covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $480. In August, a strike 110.00 covered call offers $780 and in November, a strike 110.00 covered call offers $1,410 in premium.

The annualized return by writing covered calls in July is 21.03%, in August is 14.70% and in November is 10.88%.

Chart for PPG

A July covered call on DOW at strike $55.00 using 300 shares is offering an income potential of $87. In August, a strike 55.00 covered call offers $291 and in September, a strike 55.00 covered call offers $429 in premium.

The annualized return by writing covered calls in July is 7.71%, in August is 11.04% and in September is 11.36%.

Chart for DOW


Utilities Focus: Income Opportunities

A November covered call on AES at strike $12.00 using 300 shares is offering an income potential of $105.

The annualized return by writing covered calls in November is 7.31%.

Chart for AES

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 6.51% and in November is 5.28%.

Chart for CNP


Telecommunications Focus: Income Opportunities

A July covered call on CTL at strike $28.00 using 300 shares is offering an income potential of $135. In August, a strike 28.00 covered call offers $300 and in October, a strike 28.00 covered call offers $375 in premium.

The annualized return by writing covered calls in July is 23.29%, in August is 22.52% and in October is 13.98%.

Chart for CTL

A July covered call on SBAC at strike $105.00 using 300 shares is offering an income potential of $300. In September, a strike 105.00 covered call offers $720 and in December, a strike 105.00 covered call offers $1,560 in premium.

The annualized return by writing covered calls in July is 13.89%, in September is 9.87% and in December is 10.88%.

Chart for SBAC

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

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