Income Alerts Newsletter for 07/13/2016

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 $111.50 for August 12 2016 are offering a 1.65% return, which annualizes at a rate of 19.43%.

Chart for QQQ

The DIA options at strike $183.50 for August 5 2016 are offering a 0.98% return, which annualizes at a rate of 14.91%.

Chart for DIA

The SPY options at strike $215.00 for August 5 2016 are offering a 1.11% return, which annualizes at a rate of 16.81%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $55.00 using 300 shares is offering an income potential of $450. In September, a strike 55.00 covered call offers $522 in premium.

The annualized return by writing covered calls in August is 26.43% and in September is 17.93%.

Chart for QCOM

A July covered call on BABA at strike $82.00 using 300 shares is offering an income potential of $189. In August, a strike 82.50 covered call offers $801 and in October, a strike 82.50 covered call offers $1,185 in premium.

The annualized return by writing covered calls in July is 70.88%, in August is 31.60% and in October is 18.17%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on APC at strike $57.50 using 300 shares is offering an income potential of $219. In August, a strike 57.50 covered call offers $870 and in November, a strike 57.50 covered call offers $1,560 in premium.

The annualized return by writing covered calls in July is 117.50%, in August is 49.79% and in November is 27.96%.

Chart for APC

A July covered call on CVX at strike $107.00 using 300 shares is offering an income potential of $186. In August, a strike 110.00 covered call offers $258 and in September, a strike 110.00 covered call offers $363 in premium.

The annualized return by writing covered calls in July is 53.29%, in August is 7.60% and in September is 6.24%.

Chart for CVX


Healthcare Focus: Income Opportunities

A July covered call on ESRX at strike $78.50 using 300 shares is offering an income potential of $120. In August, a strike 80.00 covered call offers $375 and in September, a strike 80.00 covered call offers $531 in premium.

The annualized return by writing covered calls in July is 46.87%, in August is 15.19% and in September is 12.60%.

Chart for ESRX

A July covered call on GILD at strike $87.00 using 300 shares is offering an income potential of $150. In August, a strike 87.50 covered call offers $735 and in September, a strike 87.50 covered call offers $930 in premium.

The annualized return by writing covered calls in July is 52.97%, in August is 27.24% and in September is 20.22%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A July covered call on CVS at strike $96.50 using 300 shares is offering an income potential of $114. In August, a strike 100.00 covered call offers $141 and in November, a strike 100.00 covered call offers $510 in premium.

The annualized return by writing covered calls in July is 36.08%, in August is 4.58% and in November is 5.04%.

Chart for CVS

A July covered call on PM at strike $103.00 using 300 shares is offering an income potential of $276. In August, a strike 105.00 covered call offers $327 and in September, a strike 105.00 covered call offers $483 in premium.

The annualized return by writing covered calls in July is 82.32%, in August is 10.00% and in September is 8.64%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

An August covered call on GM at strike $31.00 using 300 shares is offering an income potential of $225. In September, a strike 31.00 covered call offers $276 in premium.

The annualized return by writing covered calls in August is 23.52% and in September is 16.89%.

Chart for GM

A July covered call on HD at strike $135.00 using 300 shares is offering an income potential of $207. In August, a strike 135.00 covered call offers $858 and in September, a strike 135.00 covered call offers $1,050 in premium.

The annualized return by writing covered calls in July is 46.93%, in August is 20.29% and in September is 14.53%.

Chart for HD


Financials Focus: Income Opportunities

A July covered call on MET at strike $41.00 using 300 shares is offering an income potential of $96. In August, a strike 42.50 covered call offers $147 and in September, a strike 42.50 covered call offers $264 in premium.

The annualized return by writing covered calls in July is 72.21%, in August is 11.37% and in September is 12.00%.

Chart for MET

A July covered call on MS at strike $27.50 using 300 shares is offering an income potential of $81. In August, a strike 28.00 covered call offers $183 and in September, a strike 28.00 covered call offers $258 in premium.

The annualized return by writing covered calls in July is 90.91%, in August is 21.33% and in September is 17.67%.

Chart for MS


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $92.50 using 300 shares is offering an income potential of $132. In August, a strike 92.50 covered call offers $645 and in November, a strike 92.50 covered call offers $1,170 in premium.

The annualized return by writing covered calls in July is 43.82%, in August is 22.38% and in November is 12.42%.

Chart for UNP

An August covered call on UPS at strike $115.00 using 300 shares is offering an income potential of $84. In October, a strike 115.00 covered call offers $300 in premium.

The annualized return by writing covered calls in August is 2.38% and in October is 3.27%.

Chart for UPS


Materials Focus: Income Opportunities

A July covered call on LYB at strike $77.50 using 300 shares is offering an income potential of $210. In August, a strike 77.50 covered call offers $885 and in September, a strike 77.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in July is 83.21%, in August is 37.05% and in September is 25.03%.

Chart for LYB

A July covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $75. In August, a strike 110.00 covered call offers $660 and in November, a strike 110.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in July is 21.04%, in August is 19.33% and in November is 12.13%.

Chart for PPG


Utilities Focus: Income Opportunities

A July covered call on AEP at strike $70.00 using 300 shares is offering an income potential of $150. In August, a strike 70.00 covered call offers $375 and in November, a strike 70.00 covered call offers $690 in premium.

The annualized return by writing covered calls in July is 66.05%, in August is 17.12% and in November is 9.60%.

Chart for AEP

A November covered call on AES at strike $13.00 using 300 shares is offering an income potential of $150. In February, a strike 13.00 covered call offers $195 in premium.

The annualized return by writing covered calls in November is 11.72% and in February is 9.07%.

Chart for AES


Telecommunications Focus: Income Opportunities

An August covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $255. In October, a strike 31.00 covered call offers $315 in premium.

The annualized return by writing covered calls in August is 26.61% and in October is 12.66%.

Chart for CTL

An August covered call on TMUS at strike $44.00 using 300 shares is offering an income potential of $465. In November, a strike 44.00 covered call offers $825 in premium.

The annualized return by writing covered calls in August is 34.47% and in November is 18.88%.

Chart for TMUS

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

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