Income Alerts Newsletter for 07/08/2016

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 $109.00 for July 29 2016 are offering a 1.30% return, which annualizes at a rate of 21.51%.

Chart for QQQ

The DIA options at strike $179.00 for July 29 2016 are offering a 1.07% return, which annualizes at a rate of 17.82%.

Chart for DIA

The SPY options at strike $209.00 for November 19 2016 are offering a 3.56% return, which annualizes at a rate of 9.63%.

Chart for SPY


Technology Focus: Income Opportunities

A July covered call on BABA at strike $79.50 using 300 shares is offering an income potential of $300. In August, a strike 80.00 covered call offers $879 and in October, a strike 80.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in July is 51.76%, in August is 31.81% and in October is 20.51%.

Chart for BABA

A July covered call on AAPL at strike $96.00 using 300 shares is offering an income potential of $270. In August, a strike 97.50 covered call offers $633 and in September, a strike 97.50 covered call offers $810 in premium.

The annualized return by writing covered calls in July is 38.40%, in August is 18.65% and in September is 14.68%.

Chart for AAPL


Energy Focus: Income Opportunities

A July covered call on SLB at strike $78.00 using 300 shares is offering an income potential of $291. In August, a strike 80.00 covered call offers $474 and in November, a strike 80.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in July is 51.27%, in August is 17.22% and in November is 12.56%.

Chart for SLB

A July covered call on APC at strike $55.50 using 300 shares is offering an income potential of $276. In August, a strike 57.50 covered call offers $624 and in November, a strike 57.50 covered call offers $1,260 in premium.

The annualized return by writing covered calls in July is 68.71%, in August is 32.47% and in November is 22.11%.

Chart for APC


Healthcare Focus: Income Opportunities

A July covered call on MRK at strike $59.00 using 300 shares is offering an income potential of $120. In August, a strike 60.00 covered call offers $222 and in October, a strike 60.00 covered call offers $384 in premium.

The annualized return by writing covered calls in July is 27.79%, in August is 10.58% and in October is 7.59%.

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 $237 in premium.

The annualized return by writing covered calls in August is 13.91% and in September is 11.45%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A July covered call on CVS at strike $96.00 using 300 shares is offering an income potential of $153. In August, a strike 100.00 covered call offers $162 and in November, a strike 100.00 covered call offers $534 in premium.

The annualized return by writing covered calls in July is 21.77%, in August is 4.72% and in November is 5.14%.

Chart for CVS

A July covered call on PEP at strike $108.00 using 300 shares is offering an income potential of $216. In August, a strike 110.00 covered call offers $264 and in October, a strike 110.00 covered call offers $552 in premium.

The annualized return by writing covered calls in July is 27.35%, in August is 6.85% and in October is 5.94%.

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 $225. In August, a strike 135.00 covered call offers $498 and in September, a strike 135.00 covered call offers $666 in premium.

The annualized return by writing covered calls in July is 23.32%, in August is 10.63% and in September is 8.73%.

Chart for HD

A July covered call on CBS at strike $56.50 using 300 shares is offering an income potential of $96. In August, a strike 57.50 covered call offers $417 and in September, a strike 57.50 covered call offers $549 in premium.

The annualized return by writing covered calls in July is 23.26%, in August is 21.07% and in September is 17.09%.

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 $126. In August, a strike 26.00 covered call offers $285 and in September, a strike 26.00 covered call offers $369 in premium.

The annualized return by writing covered calls in July is 67.41%, in August is 31.85% and in September is 25.49%.

Chart for MS


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $88.50 using 300 shares is offering an income potential of $246. In August, a strike 90.00 covered call offers $603 and in November, a strike 90.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in July is 38.13%, in August is 19.38% and in November is 11.86%.

Chart for UNP

A July covered call on UTX at strike $102.00 using 300 shares is offering an income potential of $255. In August, a strike 105.00 covered call offers $294 and in November, a strike 105.00 covered call offers $768 in premium.

The annualized return by writing covered calls in July is 34.09%, in August is 8.05% and in November is 6.96%.

Chart for UTX


Materials Focus: Income Opportunities

A July covered call on NEM at strike $41.00 using 300 shares is offering an income potential of $336. In August, a strike 41.00 covered call offers $837 and in September, a strike 41.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in July is 114.01%, in August is 60.63% and in September is 46.63%.

Chart for NEM


Utilities Focus: Income Opportunities

A July covered call on ED at strike $80.00 using 300 shares is offering an income potential of $225. In August, a strike 80.00 covered call offers $525 and in November, a strike 80.00 covered call offers $885 in premium.

The annualized return by writing covered calls in July is 38.39%, in August is 18.55% and in November is 10.35%.

Chart for ED

A July covered call on NEE at strike $130.00 using 300 shares is offering an income potential of $150. In August, a strike 130.00 covered call offers $645 and in September, a strike 130.00 covered call offers $765 in premium.

The annualized return by writing covered calls in July is 15.86%, in August is 14.13% and in September is 10.28%.

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 23.22% and in October is 11.40%.

Chart for CTL

An August covered call on LVLT at strike $52.50 using 300 shares is offering an income potential of $450. In September, a strike 52.50 covered call offers $540 in premium.

The annualized return by writing covered calls in August is 25.03% and in September is 18.47%.

Chart for LVLT

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

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