Income Alerts Newsletter for 07/14/2016

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 5 2016 are offering a 1.27% return, which annualizes at a rate of 20.08%.

Chart for QQQ

The DIA options at strike $184.00 for August 5 2016 are offering a 0.83% return, which annualizes at a rate of 13.25%.

Chart for DIA

The SPY options at strike $215.00 for August 5 2016 are offering a 1.07% return, which annualizes at a rate of 16.94%.

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 $501. In September, a strike 55.00 covered call offers $564 in premium.

The annualized return by writing covered calls in August is 30.17% and in September is 19.64%.

Chart for QCOM

A July covered call on BABA at strike $81.00 using 300 shares is offering an income potential of $120. In August, a strike 82.50 covered call offers $606 and in October, a strike 82.50 covered call offers $990 in premium.

The annualized return by writing covered calls in July is 60.70%, in August is 24.70% and in October is 15.43%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on APC at strike $56.50 using 300 shares is offering an income potential of $96. In August, a strike 57.50 covered call offers $600 and in November, a strike 57.50 covered call offers $1,245 in premium.

The annualized return by writing covered calls in July is 69.80%, in August is 35.51% and in November is 22.60%.

Chart for APC

A July covered call on CVX at strike $107.00 using 300 shares is offering an income potential of $105. In August, a strike 110.00 covered call offers $225 and in September, a strike 110.00 covered call offers $354 in premium.

The annualized return by writing covered calls in July is 40.06%, in August is 6.80% and in September is 6.19%.

Chart for CVX


Healthcare Focus: Income Opportunities

A July covered call on ESRX at strike $79.00 using 300 shares is offering an income potential of $96. In August, a strike 80.00 covered call offers $429 and in September, a strike 80.00 covered call offers $570 in premium.

The annualized return by writing covered calls in July is 49.74%, in August is 17.80% and in September is 13.70%.

Chart for ESRX

A July covered call on GILD at strike $86.00 using 300 shares is offering an income potential of $222. In August, a strike 87.50 covered call offers $693 and in September, a strike 87.50 covered call offers $882 in premium.

The annualized return by writing covered calls in July is 105.91%, in August is 26.59% and in September is 19.63%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

An August covered call on CVS at strike $100.00 using 300 shares is offering an income potential of $231. In November, a strike 100.00 covered call offers $696 in premium.

The annualized return by writing covered calls in August is 7.64% and in November is 6.89%.

Chart for CVS

An August covered call on PM at strike $105.00 using 300 shares is offering an income potential of $321. In September, a strike 105.00 covered call offers $483 in premium.

The annualized return by writing covered calls in August is 10.06% and in September is 8.76%.

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 $210. In September, a strike 31.00 covered call offers $270 in premium.

The annualized return by writing covered calls in August is 22.46% and in September is 16.74%.

Chart for GM

A July covered call on HD at strike $134.00 using 300 shares is offering an income potential of $117. In August, a strike 135.00 covered call offers $678 and in September, a strike 135.00 covered call offers $840 in premium.

The annualized return by writing covered calls in July is 35.63%, in August is 16.53% and in September is 11.84%.

Chart for HD


Financials Focus: Income Opportunities

A July covered call on MET at strike $40.50 using 300 shares is offering an income potential of $99. In August, a strike 42.50 covered call offers $117 and in September, a strike 42.50 covered call offers $210 in premium.

The annualized return by writing covered calls in July is 100.00%, in August is 9.34% and in September is 9.73%.

Chart for MET

An August covered call on MS at strike $28.00 using 300 shares is offering an income potential of $159. In September, a strike 28.00 covered call offers $228 in premium.

The annualized return by writing covered calls in August is 19.12% and in September is 15.92%.

Chart for MS


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $94.50 using 300 shares is offering an income potential of $129. In August, a strike 95.00 covered call offers $600 and in November, a strike 95.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in July is 55.83%, in August is 20.85% and in November is 12.39%.

Chart for UNP

A July covered call on UPS at strike $111.00 using 300 shares is offering an income potential of $78. In August, a strike 115.00 covered call offers $93 and in October, a strike 115.00 covered call offers $324 in premium.

The annualized return by writing covered calls in July is 28.62%, in August is 2.70% and in October is 3.56%.

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 $90. In August, a strike 77.50 covered call offers $675 and in September, a strike 77.50 covered call offers $840 in premium.

The annualized return by writing covered calls in July is 47.74%, in August is 29.01% and in September is 20.94%.

Chart for LYB

An August covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $615. In November, a strike 110.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in August is 18.33% and in November is 12.13%.

Chart for PPG


Utilities Focus: Income Opportunities

An August covered call on AEP at strike $72.50 using 300 shares is offering an income potential of $90. In November, a strike 72.50 covered call offers $345 in premium.

The annualized return by writing covered calls in August is 4.13% and in November is 4.73%.

Chart for AEP

A November covered call on AES at strike $13.00 using 300 shares is offering an income potential of $150.

The annualized return by writing covered calls in November is 11.66%.

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 $270. In October, a strike 31.00 covered call offers $330 in premium.

The annualized return by writing covered calls in August is 28.84% and in October is 13.35%.

Chart for CTL

An August covered call on TMUS at strike $45.00 using 300 shares is offering an income potential of $318. In November, a strike 45.00 covered call offers $723 in premium.

The annualized return by writing covered calls in August is 23.60% and in November is 16.31%.

Chart for TMUS

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

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