Income Alerts Newsletter for 07/01/2016

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 $108.00 for July 22 2016 are offering a 1.16% return, which annualizes at a rate of 19.20%.

Chart for QQQ

The DIA options at strike $179.50 for July 22 2016 are offering a 0.90% return, which annualizes at a rate of 14.96%.

Chart for DIA

The SPY options at strike $209.50 for July 22 2016 are offering a 1.17% return, which annualizes at a rate of 19.39%.

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 $159. In August, a strike 55.00 covered call offers $393 and in September, a strike 55.00 covered call offers $465 in premium.

The annualized return by writing covered calls in July is 22.80%, in August is 17.94% and in September is 13.77%.

Chart for QCOM

A July covered call on BABA at strike $80.00 using 300 shares is offering an income potential of $387. In August, a strike 80.00 covered call offers $945 and in October, a strike 80.00 covered call offers $1,380 in premium.

The annualized return by writing covered calls in July is 37.61%, in August is 29.52% and in October is 19.66%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on HAL at strike $45.50 using 300 shares is offering an income potential of $273. In August, a strike 46.00 covered call offers $477 and in September, a strike 46.00 covered call offers $627 in premium.

The annualized return by writing covered calls in July is 46.78%, in August is 26.04% and in September is 22.35%.

Chart for HAL

A July covered call on HES at strike $60.50 using 300 shares is offering an income potential of $477. In August, a strike 62.50 covered call offers $726 and in September, a strike 62.50 covered call offers $915 in premium.

The annualized return by writing covered calls in July is 61.99%, in August is 30.03% and in September is 24.70%.

Chart for HES


Healthcare Focus: Income Opportunities

A July covered call on GILD at strike $83.50 using 300 shares is offering an income potential of $405. In August, a strike 85.00 covered call offers $732 and in September, a strike 85.00 covered call offers $930 in premium.

The annualized return by writing covered calls in July is 37.53%, in August is 21.56% and in September is 17.83%.

Chart for GILD

A July covered call on MCK at strike $190.00 using 300 shares is offering an income potential of $330. In August, a strike 190.00 covered call offers $1,260 and in November, a strike 190.00 covered call offers $2,160 in premium.

The annualized return by writing covered calls in July is 13.52%, in August is 16.48% and in November is 10.31%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A July covered call on CVS at strike $96.00 using 300 shares is offering an income potential of $291. In August, a strike 100.00 covered call offers $201 and in November, a strike 100.00 covered call offers $585 in premium.

The annualized return by writing covered calls in July is 23.35%, in August is 5.04% and in November is 5.34%.

Chart for CVS

A July covered call on STZ at strike $170.00 using 300 shares is offering an income potential of $150. In August, a strike 170.00 covered call offers $675 and in October, a strike 170.00 covered call offers $1,500 in premium.

The annualized return by writing covered calls in July is 6.92%, in August is 9.87% and in October is 9.98%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

A July covered call on CBS at strike $54.50 using 300 shares is offering an income potential of $198. In August, a strike 55.00 covered call offers $558 and in September, a strike 55.00 covered call offers $669 in premium.

The annualized return by writing covered calls in July is 28.00%, in August is 25.32% and in September is 19.73%.

Chart for CBS

A July covered call on CMCSA at strike $65.50 using 300 shares is offering an income potential of $144. In August, a strike 67.50 covered call offers $192 and in October, a strike 67.50 covered call offers $396 in premium.

The annualized return by writing covered calls in July is 16.92%, in August is 7.10% and in October is 6.62%.

Chart for CMCSA


Financials Focus: Income Opportunities

A July covered call on GS at strike $149.00 using 300 shares is offering an income potential of $831. In August, a strike 150.00 covered call offers $1,485 and in October, a strike 150.00 covered call offers $2,310 in premium.

The annualized return by writing covered calls in July is 43.34%, in August is 24.67% and in October is 17.50%.

Chart for GS

A July covered call on MS at strike $26.00 using 300 shares is offering an income potential of $171. In August, a strike 26.00 covered call offers $336 and in September, a strike 26.00 covered call offers $408 in premium.

The annualized return by writing covered calls in July is 51.17%, in August is 32.24% and in September is 25.52%.

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 $378. In August, a strike 87.50 covered call offers $915 and in November, a strike 87.50 covered call offers $1,245 in premium.

The annualized return by writing covered calls in July is 33.43%, in August is 25.92% and in November is 12.84%.

Chart for UNP

A July covered call on UTX at strike $103.00 using 300 shares is offering an income potential of $264. In August, a strike 105.00 covered call offers $372 and in November, a strike 105.00 covered call offers $837 in premium.

The annualized return by writing covered calls in July is 19.75%, in August is 8.76% and in November is 7.19%.

Chart for UTX


Materials Focus: Income Opportunities

A July covered call on MON at strike $104.00 using 300 shares is offering an income potential of $621. In August, a strike 105.00 covered call offers $1,350 and in October, a strike 105.00 covered call offers $1,920 in premium.

The annualized return by writing covered calls in July is 46.60%, in August is 32.56% and in October is 21.12%.

Chart for MON

A July covered call on NEM at strike $39.50 using 300 shares is offering an income potential of $351. In August, a strike 40.00 covered call offers $609 and in September, a strike 40.00 covered call offers $792 in premium.

The annualized return by writing covered calls in July is 70.33%, in August is 39.17% and in September is 33.44%.

Chart for NEM


Utilities Focus: Income Opportunities

An August covered call on D at strike $80.00 using 300 shares is offering an income potential of $240. In October, a strike 80.00 covered call offers $375 in premium.

The annualized return by writing covered calls in August is 7.42% and in October is 5.22%.

Chart for D

An August covered call on DUK at strike $87.50 using 300 shares is offering an income potential of $270. In October, a strike 87.50 covered call offers $480 in premium.

The annualized return by writing covered calls in August is 7.59% and in October is 6.08%.

Chart for DUK


Telecommunications Focus: Income Opportunities

An August covered call on CTL at strike $30.00 using 300 shares is offering an income potential of $150. In October, a strike 30.00 covered call offers $225 in premium.

The annualized return by writing covered calls in August is 12.55% and in October is 8.50%.

Chart for CTL

A July covered call on LVLT at strike $52.50 using 300 shares is offering an income potential of $120. In August, a strike 52.50 covered call offers $510 and in September, a strike 52.50 covered call offers $660 in premium.

The annualized return by writing covered calls in July is 17.86%, in August is 24.44% and in September is 20.62%.

Chart for LVLT

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

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