Income Alerts Newsletter for 07/06/2016

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 $107.50 for July 29 2016 are offering a 1.61% return, which annualizes at a rate of 24.46%.

Chart for QQQ

The DIA options at strike $178.50 for July 29 2016 are offering a 1.12% return, which annualizes at a rate of 17.00%.

Chart for DIA

The SPY options at strike $208.50 for July 29 2016 are offering a 1.29% return, which annualizes at a rate of 19.66%.

Chart for SPY


Technology Focus: Income Opportunities

A July covered call on BABA at strike $79.00 using 300 shares is offering an income potential of $381. In August, a strike 80.00 covered call offers $855 and in October, a strike 80.00 covered call offers $1,275 in premium.

The annualized return by writing covered calls in July is 54.24%, in August is 29.71% and in October is 19.05%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on SLB at strike $78.00 using 300 shares is offering an income potential of $324. In August, a strike 80.00 covered call offers $522 and in November, a strike 80.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in July is 46.81%, in August is 18.19% and in November is 12.39%.

Chart for SLB

A July covered call on APC at strike $54.00 using 300 shares is offering an income potential of $576. In August, a strike 55.00 covered call offers $726 and in November, a strike 55.00 covered call offers $1,380 in premium.

The annualized return by writing covered calls in July is 123.25%, in August is 37.51% and in November is 25.01%.

Chart for APC


Healthcare Focus: Income Opportunities

A July covered call on MRK at strike $58.50 using 300 shares is offering an income potential of $93. In August, a strike 60.00 covered call offers $171 and in October, a strike 60.00 covered call offers $327 in premium.

The annualized return by writing covered calls in July is 17.83%, in August is 7.88% and in October is 6.41%.

Chart for MRK

An August covered call on PFE at strike $36.00 using 300 shares is offering an income potential of $180. In September, a strike 36.00 covered call offers $240 in premium.

The annualized return by writing covered calls in August is 13.52% and in September is 11.27%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A July covered call on PEP at strike $107.00 using 300 shares is offering an income potential of $279. In August, a strike 110.00 covered call offers $234 and in October, a strike 110.00 covered call offers $462 in premium.

The annualized return by writing covered calls in July is 29.25%, in August is 5.86% and in October is 4.92%.

Chart for PEP

A July covered call on PM at strike $103.00 using 300 shares is offering an income potential of $195. In August, a strike 105.00 covered call offers $324 and in September, a strike 105.00 covered call offers $474 in premium.

The annualized return by writing covered calls in July is 21.23%, in August is 8.47% and in September is 7.74%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A July covered call on HD at strike $130.00 using 300 shares is offering an income potential of $261. In August, a strike 130.00 covered call offers $900 and in September, a strike 130.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in July is 22.47%, in August is 18.84% and in September is 14.73%.

Chart for HD

A July covered call on CBS at strike $55.00 using 300 shares is offering an income potential of $216. In August, a strike 55.00 covered call offers $588 and in September, a strike 55.00 covered call offers $702 in premium.

The annualized return by writing covered calls in July is 44.28%, in August is 29.51% and in September is 22.06%.

Chart for CBS


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $87.50 using 300 shares is offering an income potential of $309. 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 39.68%, in August is 28.28% and in November is 14.84%.

Chart for UNP

A July covered call on UPS at strike $109.00 using 300 shares is offering an income potential of $141. In August, a strike 110.00 covered call offers $420 and in October, a strike 110.00 covered call offers $705 in premium.

The annualized return by writing covered calls in July is 14.44%, in August is 10.38% and in October is 7.42%.

Chart for UPS


Materials Focus: Income Opportunities

A July covered call on NEM at strike $40.50 using 300 shares is offering an income potential of $375. In August, a strike 41.00 covered call offers $750 and in September, a strike 41.00 covered call offers $900 in premium.

The annualized return by writing covered calls in July is 106.00%, in August is 52.37% and in September is 39.59%.

Chart for NEM


Utilities Focus: Income Opportunities

A July covered call on ED at strike $82.50 using 300 shares is offering an income potential of $135. In August, a strike 82.50 covered call offers $405 and in November, a strike 82.50 covered call offers $735 in premium.

The annualized return by writing covered calls in July is 18.38%, in August is 13.34% and in November is 8.24%.

Chart for ED

An August covered call on NEE at strike $135.00 using 300 shares is offering an income potential of $345. In September, a strike 135.00 covered call offers $435 in premium.

The annualized return by writing covered calls in August is 7.03% and in September is 5.53%.

Chart for NEE


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 $315 and in October, a strike 29.00 covered call offers $420 in premium.

The annualized return by writing covered calls in July is 40.64%, in August is 29.88% and in October is 17.03%.

Chart for CTL

A July covered call on TMUS at strike $43.50 using 300 shares is offering an income potential of $150. In August, a strike 44.00 covered call offers $414 and in November, a strike 44.00 covered call offers $792 in premium.

The annualized return by writing covered calls in July is 38.85%, in August is 26.18% and in November is 17.34%.

Chart for TMUS

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

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.