Income Alerts Newsletter for 07/05/2016

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 $108.50 for July 29 2016 are offering a 1.45% return, which annualizes at a rate of 21.24%.

Chart for QQQ

The DIA options at strike $179.50 for July 29 2016 are offering a 1.20% return, which annualizes at a rate of 17.55%.

Chart for DIA

The SPY options at strike $210.00 for July 29 2016 are offering a 1.37% return, which annualizes at a rate of 19.95%.

Chart for SPY


Technology Focus: Income Opportunities

A July covered call on BABA at strike $80.00 using 300 shares is offering an income potential of $366. In August, a strike 80.00 covered call offers $960 and in October, a strike 80.00 covered call offers $1,395 in premium.

The annualized return by writing covered calls in July is 47.31%, in August is 32.51% and in October is 20.57%.

Chart for BABA

A July covered call on AAPL at strike $96.00 using 300 shares is offering an income potential of $318. In August, a strike 97.50 covered call offers $642 and in September, a strike 97.50 covered call offers $849 in premium.

The annualized return by writing covered calls in July is 34.00%, in August is 17.73% and in September is 14.80%.

Chart for AAPL


Energy Focus: Income Opportunities

A July covered call on HAL at strike $46.00 using 300 shares is offering an income potential of $213. In August, a strike 46.00 covered call offers $528 and in September, a strike 46.00 covered call offers $651 in premium.

The annualized return by writing covered calls in July is 48.15%, in August is 31.21% and in September is 24.34%.

Chart for HAL

A July covered call on HES at strike $60.50 using 300 shares is offering an income potential of $429. In August, a strike 62.50 covered call offers $699 and in September, a strike 62.50 covered call offers $915 in premium.

The annualized return by writing covered calls in July is 74.07%, in August is 31.29% and in September is 26.00%.

Chart for HES


Healthcare Focus: Income Opportunities

A July covered call on GILD at strike $85.00 using 300 shares is offering an income potential of $432. In August, a strike 85.00 covered call offers $990 and in September, a strike 85.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in July is 52.51%, in August is 31.42% and in September is 24.07%.

Chart for GILD

A July covered call on MCK at strike $190.00 using 300 shares is offering an income potential of $555. In August, a strike 190.00 covered call offers $1,590 and in November, a strike 190.00 covered call offers $2,730 in premium.

The annualized return by writing covered calls in July is 30.21%, in August is 22.52% and in November is 13.45%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A July covered call on STZ at strike $165.00 using 300 shares is offering an income potential of $480. In August, a strike 165.00 covered call offers $1,140 and in October, a strike 165.00 covered call offers $2,070 in premium.

The annualized return by writing covered calls in July is 30.04%, in August is 18.47% and in October is 14.61%.

Chart for STZ

A July covered call on KO at strike $45.50 using 300 shares is offering an income potential of $75. In August, a strike 46.00 covered call offers $177 and in September, a strike 46.00 covered call offers $222 in premium.

The annualized return by writing covered calls in July is 16.95%, in August is 10.29% and in September is 8.11%.

Chart for KO


Consumer Discretionary Focus: Income Opportunities

A July covered call on HD at strike $130.00 using 300 shares is offering an income potential of $354. In August, a strike 130.00 covered call offers $1,020 and in September, a strike 130.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in July is 27.94%, in August is 20.92% and in September is 14.70%.

Chart for HD

A July covered call on CBS at strike $55.00 using 300 shares is offering an income potential of $264. In August, a strike 55.00 covered call offers $621 and in September, a strike 55.00 covered call offers $738 in premium.

The annualized return by writing covered calls in July is 49.59%, in August is 30.45% and in September is 22.85%.

Chart for CBS


Financials Focus: Income Opportunities

A July covered call on MS at strike $26.00 using 300 shares is offering an income potential of $168. In August, a strike 26.00 covered call offers $324 and in September, a strike 26.00 covered call offers $399 in premium.

The annualized return by writing covered calls in July is 67.17%, in August is 33.77% and in September is 26.32%.

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 $381. In August, a strike 87.50 covered call offers $900 and in November, a strike 87.50 covered call offers $1,380 in premium.

The annualized return by writing covered calls in July is 44.88%, in August is 27.62% and in November is 14.70%.

Chart for UNP

A July covered call on UTX at strike $103.00 using 300 shares is offering an income potential of $279. In August, a strike 105.00 covered call offers $399 and in November, a strike 105.00 covered call offers $858 in premium.

The annualized return by writing covered calls in July is 27.79%, in August is 10.19% and in November is 7.57%.

Chart for UTX


Materials Focus: Income Opportunities

A July covered call on NEM at strike $40.50 using 300 shares is offering an income potential of $372. In August, a strike 41.00 covered call offers $717 and in September, a strike 41.00 covered call offers $900 in premium.

The annualized return by writing covered calls in July is 96.46%, in August is 48.91% and in September is 39.10%.

Chart for NEM

A July covered call on FCX at strike $11.50 using 300 shares is offering an income potential of $135. In August, a strike 12.00 covered call offers $237 and in September, a strike 12.00 covered call offers $306 in premium.

The annualized return by writing covered calls in July is 125.57%, in August is 58.10% and in September is 48.05%.

Chart for FCX


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 8.06% and in October is 5.41%.

Chart for D

An August covered call on DUK at strike $87.50 using 300 shares is offering an income potential of $255. In October, a strike 87.50 covered call offers $465 in premium.

The annualized return by writing covered calls in August is 7.79% and in October is 6.12%.

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 $225. In October, a strike 30.00 covered call offers $285 in premium.

The annualized return by writing covered calls in August is 20.35% and in October is 11.09%.

Chart for CTL

A July covered call on LVLT at strike $52.50 using 300 shares is offering an income potential of $150. In August, a strike 52.50 covered call offers $570 and in September, a strike 52.50 covered call offers $690 in premium.

The annualized return by writing covered calls in July is 29.57%, in August is 29.49% and in September is 22.55%.

Chart for LVLT

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

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