Income Alerts Newsletter for 07/15/2016

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 $112.00 for August 5 2016 are offering a 1.30% return, which annualizes at a rate of 21.61%.

Chart for QQQ

The DIA options at strike $185.00 for August 5 2016 are offering a 0.88% return, which annualizes at a rate of 14.57%.

Chart for DIA

The SPY options at strike $216.50 for August 5 2016 are offering a 0.97% return, which annualizes at a rate of 16.12%.

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 $483. In September, a strike 55.00 covered call offers $564 in premium.

The annualized return by writing covered calls in August is 29.81% and in September is 19.92%.

Chart for QCOM

A July covered call on BABA at strike $82.00 using 300 shares is offering an income potential of $108. In August, a strike 82.50 covered call offers $774 and in October, a strike 82.50 covered call offers $1,170 in premium.

The annualized return by writing covered calls in July is 80.73%, in August is 32.15% and in October is 18.29%.

Chart for BABA


Energy Focus: Income Opportunities

A July covered call on APC at strike $56.00 using 300 shares is offering an income potential of $75. In August, a strike 57.50 covered call offers $483 and in November, a strike 57.50 covered call offers $1,185 in premium.

The annualized return by writing covered calls in July is 82.55%, in August is 29.46% and in November is 21.84%.

Chart for APC

A July covered call on CVX at strike $107.00 using 300 shares is offering an income potential of $75. In August, a strike 110.00 covered call offers $207 and in September, a strike 110.00 covered call offers $360 in premium.

The annualized return by writing covered calls in July is 42.86%, in August is 6.42% and in September is 6.39%.

Chart for CVX


Healthcare Focus: Income Opportunities

A July covered call on ESRX at strike $79.50 using 300 shares is offering an income potential of $81. In August, a strike 80.00 covered call offers $498 and in September, a strike 80.00 covered call offers $672 in premium.

The annualized return by writing covered calls in July is 62.23%, in August is 21.05% and in September is 16.29%.

Chart for ESRX

An August covered call on GILD at strike $87.50 using 300 shares is offering an income potential of $582. In September, a strike 87.50 covered call offers $759 in premium.

The annualized return by writing covered calls in August is 22.89% and in September is 17.11%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

A July covered call on CVS at strike $97.50 using 300 shares is offering an income potential of $84. In August, a strike 100.00 covered call offers $204 and in November, a strike 100.00 covered call offers $642 in premium.

The annualized return by writing covered calls in July is 52.58%, in August is 6.93% and in November is 6.40%.

Chart for CVS

An August covered call on PM at strike $105.00 using 300 shares is offering an income potential of $300. In September, a strike 105.00 covered call offers $462 in premium.

The annualized return by writing covered calls in August is 9.65% and in September is 8.51%.

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 $228. In September, a strike 31.00 covered call offers $288 in premium.

The annualized return by writing covered calls in August is 24.99% and in September is 18.09%.

Chart for GM

An August covered call on HD at strike $135.00 using 300 shares is offering an income potential of $756. In September, a strike 135.00 covered call offers $960 in premium.

The annualized return by writing covered calls in August is 18.83% and in September is 13.68%.

Chart for HD


Financials Focus: Income Opportunities

A July covered call on MET at strike $42.50 using 300 shares is offering an income potential of $78. In August, a strike 42.50 covered call offers $408 and in September, a strike 42.50 covered call offers $501 in premium.

The annualized return by writing covered calls in July is 112.65%, in August is 32.71% and in September is 23.04%.

Chart for MET

An August covered call on MS at strike $29.00 using 300 shares is offering an income potential of $138. In September, a strike 29.00 covered call offers $213 in premium.

The annualized return by writing covered calls in August is 16.48% and in September is 14.61%.

Chart for MS


Industrials Focus: Income Opportunities

A July covered call on UNP at strike $95.00 using 300 shares is offering an income potential of $81. In August, a strike 95.00 covered call offers $681 and in November, a strike 95.00 covered call offers $1,245 in premium.

The annualized return by writing covered calls in July is 52.18%, in August is 24.23% and in November is 13.07%.

Chart for UNP

An August covered call on UPS at strike $115.00 using 300 shares is offering an income potential of $135. In October, a strike 115.00 covered call offers $384 in premium.

The annualized return by writing covered calls in August is 4.00% and in October is 4.24%.

Chart for UPS


Materials Focus: Income Opportunities

An August covered call on LYB at strike $80.00 using 300 shares is offering an income potential of $480. In September, a strike 80.00 covered call offers $660 in premium.

The annualized return by writing covered calls in August is 20.77% and in September is 16.38%.

Chart for LYB

An August covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $585. In November, a strike 110.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in August is 18.03% and in November is 11.75%.

Chart for PPG


Utilities Focus: Income Opportunities

An August covered call on AEP at strike $70.00 using 300 shares is offering an income potential of $255. In November, a strike 70.00 covered call offers $585 in premium.

The annualized return by writing covered calls in August is 12.24% and in November is 8.25%.

Chart for AEP

A November covered call on AES at strike $13.00 using 300 shares is offering an income potential of $135.

The annualized return by writing covered calls in November is 10.63%.

Chart for AES


Telecommunications Focus: Income Opportunities

An August covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $180. In October, a strike 32.00 covered call offers $255 in premium.

The annualized return by writing covered calls in August is 19.28% and in October is 10.19%.

Chart for CTL

An August covered call on TMUS at strike $45.00 using 300 shares is offering an income potential of $327. In November, a strike 45.00 covered call offers $696 in premium.

The annualized return by writing covered calls in August is 25.04% and in November is 15.86%.

Chart for TMUS

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

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