Income Alerts Newsletter for 07/12/2016

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 $111.00 for August 5 2016 are offering a 1.42% return, which annualizes at a rate of 20.69%.

Chart for QQQ

The DIA options at strike $182.50 for August 5 2016 are offering a 1.04% return, which annualizes at a rate of 15.23%.

Chart for DIA

The SPY options at strike $213.50 for August 5 2016 are offering a 1.18% return, which annualizes at a rate of 17.17%.

Chart for SPY


Technology Focus: Income Opportunities

A July covered call on QCOM at strike $54.50 using 300 shares is offering an income potential of $108. In August, a strike 55.00 covered call offers $405 and in September, a strike 55.00 covered call offers $468 in premium.

The annualized return by writing covered calls in July is 48.89%, in August is 23.35% and in September is 15.93%.

Chart for QCOM

A July covered call on BABA at strike $81.50 using 300 shares is offering an income potential of $270. In August, a strike 82.50 covered call offers $807 and in October, a strike 82.50 covered call offers $1,260 in premium.

The annualized return by writing covered calls in July is 81.55%, in August is 31.16% and in October is 19.26%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on SLB at strike $78.50 using 300 shares is offering an income potential of $156. In August, a strike 80.00 covered call offers $462 and in November, a strike 80.00 covered call offers $990 in premium.

The annualized return by writing covered calls in July is 48.98%, in August is 18.37% and in November is 12.31%.

Chart for SLB

A July covered call on APC at strike $56.00 using 300 shares is offering an income potential of $216. In August, a strike 57.50 covered call offers $609 and in November, a strike 57.50 covered call offers $1,335 in premium.

The annualized return by writing covered calls in July is 95.32%, in August is 34.41% and in November is 24.12%.

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 $96. In August, a strike 60.00 covered call offers $282 and in October, a strike 60.00 covered call offers $492 in premium.

The annualized return by writing covered calls in July is 39.58%, in August is 14.69% and in October is 10.07%.

Chart for MRK

An August covered call on PFE at strike $37.00 using 300 shares is offering an income potential of $81. In September, a strike 37.00 covered call offers $129 in premium.

The annualized return by writing covered calls in August is 6.87% and in September is 6.46%.

Chart for PFE


Consumer Staples Focus: Income Opportunities

A July covered call on CVS at strike $97.00 using 300 shares is offering an income potential of $141. In August, a strike 100.00 covered call offers $186 and in November, a strike 100.00 covered call offers $621 in premium.

The annualized return by writing covered calls in July is 35.60%, in August is 5.88% and in November is 6.09%.

Chart for CVS

A July covered call on PEP at strike $109.00 using 300 shares is offering an income potential of $159. In August, a strike 110.00 covered call offers $333 and in October, a strike 110.00 covered call offers $630 in premium.

The annualized return by writing covered calls in July is 35.70%, in August is 9.40% and in October is 6.97%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

An August covered call on GM at strike $31.00 using 300 shares is offering an income potential of $168. In September, a strike 31.00 covered call offers $222 in premium.

The annualized return by writing covered calls in August is 17.28% and in September is 13.52%.

Chart for GM

A July covered call on FOXA at strike $29.50 using 300 shares is offering an income potential of $105. In August, a strike 28.00 covered call offers $210 and in October, a strike 28.00 covered call offers $330 in premium.

The annualized return by writing covered calls in July is 93.18%, in August is 23.60% and in October is 14.62%.

Chart for FOXA


Financials Focus: Income Opportunities

A July covered call on GS at strike $152.50 using 300 shares is offering an income potential of $402. In August, a strike 155.00 covered call offers $1,035 and in October, a strike 155.00 covered call offers $1,875 in premium.

The annualized return by writing covered calls in July is 64.85%, in August is 21.17% and in October is 15.18%.

Chart for GS

A July covered call on MS at strike $26.50 using 300 shares is offering an income potential of $111. In August, a strike 27.00 covered call offers $207 and in September, a strike 27.00 covered call offers $291 in premium.

The annualized return by writing covered calls in July is 103.53%, in August is 24.43% and in September is 20.43%.

Chart for MS


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $91.50 using 300 shares is offering an income potential of $219. In August, a strike 92.50 covered call offers $606 and in November, a strike 92.50 covered call offers $1,125 in premium.

The annualized return by writing covered calls in July is 58.78%, in August is 20.62% and in November is 11.92%.

Chart for UNP

A July covered call on UTX at strike $104.00 using 300 shares is offering an income potential of $213. In August, a strike 105.00 covered call offers $453 and in November, a strike 105.00 covered call offers $975 in premium.

The annualized return by writing covered calls in July is 50.20%, in August is 13.45% and in November is 8.99%.

Chart for UTX


Materials Focus: Income Opportunities

An August covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $420. In November, a strike 110.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in August is 12.14% and in November is 9.74%.

Chart for PPG

An August covered call on HUN at strike $15.00 using 300 shares is offering an income potential of $255. In November, a strike 15.00 covered call offers $405 in premium.

The annualized return by writing covered calls in August is 55.72% and in November is 28.03%.

Chart for HUN


Utilities Focus: Income Opportunities

An August covered call on ED at strike $82.50 using 300 shares is offering an income potential of $210. In November, a strike 82.50 covered call offers $540 in premium.

The annualized return by writing covered calls in August is 8.03% and in November is 6.40%.

Chart for ED

A July covered call on NEE at strike $130.00 using 300 shares is offering an income potential of $210. In August, a strike 130.00 covered call offers $765 and in September, a strike 130.00 covered call offers $870 in premium.

The annualized return by writing covered calls in July is 39.62%, in August is 18.30% and in September is 12.28%.

Chart for NEE


Telecommunications Focus: Income Opportunities

An August covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $210. In October, a strike 31.00 covered call offers $270 in premium.

The annualized return by writing covered calls in August is 21.56% and in October is 10.84%.

Chart for CTL

An August covered call on LVLT at strike $55.00 using 300 shares is offering an income potential of $315. In September, a strike 55.00 covered call offers $420 in premium.

The annualized return by writing covered calls in August is 18.46% and in September is 14.58%.

Chart for LVLT

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

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