Income Alerts Newsletter for 07/07/2016

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 1.41% return, which annualizes at a rate of 22.44%.

Chart for QQQ

The DIA options at strike $179.00 for July 29 2016 are offering a 1.18% return, which annualizes at a rate of 18.75%.

Chart for DIA

The SPY options at strike $210.00 for July 29 2016 are offering a 1.23% return, which annualizes at a rate of 19.46%.

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 $300. In August, a strike 80.00 covered call offers $798 and in October, a strike 80.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in July is 47.01%, in August is 28.40% and in October is 17.87%.

Chart for BABA

A July covered call on FB at strike $117.00 using 300 shares is offering an income potential of $303. In August, a strike 120.00 covered call offers $930 and in September, a strike 120.00 covered call offers $1,305 in premium.

The annualized return by writing covered calls in July is 31.87%, in August is 22.13% and in September is 19.36%.

Chart for FB


Energy Focus: Income Opportunities

A July covered call on SLB at strike $78.50 using 300 shares is offering an income potential of $246. In August, a strike 80.00 covered call offers $528 and in November, a strike 80.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in July is 38.75%, in August is 18.71% and in November is 12.41%.

Chart for SLB

A July covered call on APC at strike $55.50 using 300 shares is offering an income potential of $309. In August, a strike 57.50 covered call offers $615 and in November, a strike 57.50 covered call offers $1,260 in premium.

The annualized return by writing covered calls in July is 69.41%, in August is 31.29% and in November is 22.11%.

Chart for APC


Healthcare Focus: Income Opportunities

A July covered call on MRK at strike $59.50 using 300 shares is offering an income potential of $120. In August, a strike 60.00 covered call offers $300 and in October, a strike 60.00 covered call offers $492 in premium.

The annualized return by writing covered calls in July is 24.85%, in August is 13.95% and in October is 9.64%.

Chart for MRK

An August covered call on PFE at strike $36.00 using 300 shares is offering an income potential of $177. In September, a strike 36.00 covered call offers $249 in premium.

The annualized return by writing covered calls in August is 13.57% and in September is 11.85%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A July covered call on CVS at strike $96.50 using 300 shares is offering an income potential of $204. In August, a strike 100.00 covered call offers $213 and in November, a strike 100.00 covered call offers $612 in premium.

The annualized return by writing covered calls in July is 26.02%, in August is 6.04% and in November is 5.82%.

Chart for CVS

A July covered call on PEP at strike $106.00 using 300 shares is offering an income potential of $441. In August, a strike 110.00 covered call offers $183 and in October, a strike 110.00 covered call offers $420 in premium.

The annualized return by writing covered calls in July is 51.37%, in August is 4.70% and in October is 4.53%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A July covered call on HD at strike $132.00 using 300 shares is offering an income potential of $300. In August, a strike 135.00 covered call offers $573 and in September, a strike 135.00 covered call offers $687 in premium.

The annualized return by writing covered calls in July is 27.95%, in August is 11.95% and in September is 8.86%.

Chart for HD

A July covered call on CBS at strike $55.50 using 300 shares is offering an income potential of $198. In August, a strike 57.50 covered call offers $321 and in September, a strike 57.50 covered call offers $429 in premium.

The annualized return by writing covered calls in July is 44.26%, in August is 16.07% and in September is 13.32%.

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 $300. In August, a strike 87.50 covered call offers $900 and in November, a strike 87.50 covered call offers $1,320 in premium.

The annualized return by writing covered calls in July is 42.23%, in August is 28.82% and in November is 14.22%.

Chart for UNP

A July covered call on UTX at strike $102.00 using 300 shares is offering an income potential of $210. In August, a strike 105.00 covered call offers $267 and in November, a strike 105.00 covered call offers $669 in premium.

The annualized return by writing covered calls in July is 25.38%, in August is 7.18% and in November is 6.04%.

Chart for UTX


Materials Focus: Income Opportunities

A July covered call on FCX at strike $11.00 using 300 shares is offering an income potential of $123. In August, a strike 11.00 covered call offers $303 and in September, a strike 11.00 covered call offers $372 in premium.

The annualized return by writing covered calls in July is 142.80%, in August is 82.92% and in September is 64.25%.

Chart for FCX

A July covered call on NEM at strike $41.50 using 300 shares is offering an income potential of $378. In August, a strike 42.00 covered call offers $792 and in September, a strike 42.00 covered call offers $990 in premium.

The annualized return by writing covered calls in July is 114.52%, in August is 55.22% and in September is 43.28%.

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 $90. In August, a strike 82.50 covered call offers $390 and in November, a strike 82.50 covered call offers $690 in premium.

The annualized return by writing covered calls in July is 13.48%, in August is 13.14% and in November is 7.79%.

Chart for ED

An August covered call on NEE at strike $135.00 using 300 shares is offering an income potential of $330. In September, a strike 135.00 covered call offers $435 in premium.

The annualized return by writing covered calls in August is 6.87% and in September is 5.60%.

Chart for NEE


Telecommunications Focus: Income Opportunities

An August covered call on CTL at strike $30.00 using 300 shares is offering an income potential of $240. In October, a strike 30.00 covered call offers $285 in premium.

The annualized return by writing covered calls in August is 22.61% and in October is 11.25%.

Chart for CTL

A July covered call on TMUS at strike $43.50 using 300 shares is offering an income potential of $135. In August, a strike 44.00 covered call offers $399 and in November, a strike 44.00 covered call offers $780 in premium.

The annualized return by writing covered calls in July is 38.47%, in August is 25.80% and in November is 17.21%.

Chart for TMUS

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

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