Income Alerts Newsletter for 07/19/2016

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 $113.00 for August 12 2016 are offering a 1.21% return, which annualizes at a rate of 17.59%.

Chart for QQQ

The DIA options at strike $185.50 for August 12 2016 are offering a 0.87% return, which annualizes at a rate of 12.65%.

Chart for DIA

The SPY options at strike $216.50 for August 12 2016 are offering a 1.02% return, which annualizes at a rate of 14.86%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $55.50 using 300 shares is offering an income potential of $438. In September, a strike 57.50 covered call offers $246 and in October, a strike 57.50 covered call offers $357 in premium.

The annualized return by writing covered calls in August is 29.97%, in September is 9.00% and in October is 8.35%.

Chart for QCOM

An August covered call on BABA at strike $83.00 using 300 shares is offering an income potential of $759. In September, a strike 85.00 covered call offers $675 and in October, a strike 85.00 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 34.93%, in September is 16.75% and in October is 14.32%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on APC at strike $55.50 using 300 shares is offering an income potential of $636. In September, a strike 57.50 covered call offers $636 and in November, a strike 57.50 covered call offers $1,065 in premium.

The annualized return by writing covered calls in August is 44.26%, in September is 23.94% and in November is 20.27%.

Chart for APC

An August covered call on CVX at strike $110.00 using 300 shares is offering an income potential of $135. In September, a strike 110.00 covered call offers $258 and in October, a strike 110.00 covered call offers $468 in premium.

The annualized return by writing covered calls in August is 4.71%, in September is 4.89% and in October is 5.67%.

Chart for CVX


Healthcare Focus: Income Opportunities

An August covered call on ESRX at strike $80.00 using 300 shares is offering an income potential of $498. In September, a strike 80.00 covered call offers $666 and in November, a strike 80.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in August is 23.53%, in September is 17.15% and in November is 13.93%.

Chart for ESRX

An August covered call on GILD at strike $87.00 using 300 shares is offering an income potential of $825. In September, a strike 87.50 covered call offers $915 and in November, a strike 87.50 covered call offers $1,395 in premium.

The annualized return by writing covered calls in August is 36.13%, in September is 21.76% and in November is 16.64%.

Chart for GILD


Consumer Staples Focus: Income Opportunities

An August covered call on CVS at strike $97.00 using 300 shares is offering an income potential of $444. In November, a strike 100.00 covered call offers $570 and in January, a strike 97.50 covered call offers $1,215 in premium.

The annualized return by writing covered calls in August is 17.16%, in November is 5.89% and in January is 8.52%.

Chart for CVS

An August covered call on PM at strike $104.00 using 300 shares is offering an income potential of $360. In September, a strike 105.00 covered call offers $438 and in December, a strike 105.00 covered call offers $750 in premium.

The annualized return by writing covered calls in August is 13.04%, in September is 8.60% and in December is 5.97%.

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 $222. In September, a strike 31.00 covered call offers $291 and in December, a strike 31.00 covered call offers $447 in premium.

The annualized return by writing covered calls in August is 27.17%, in September is 19.41% and in December is 12.18%.

Chart for GM

An August covered call on HD at strike $137.00 using 300 shares is offering an income potential of $690. In September, a strike 140.00 covered call offers $468 and in October, a strike 140.00 covered call offers $705 in premium.

The annualized return by writing covered calls in August is 18.98%, in September is 6.93% and in October is 6.67%.

Chart for HD


Financials Focus: Income Opportunities

An August covered call on MET at strike $43.50 using 300 shares is offering an income potential of $276. In September, a strike 45.00 covered call offers $228 and in October, a strike 45.00 covered call offers $345 in premium.

The annualized return by writing covered calls in August is 24.13%, in September is 10.74% and in October is 10.43%.

Chart for MET

An August covered call on MS at strike $29.00 using 300 shares is offering an income potential of $120. In September, a strike 29.00 covered call offers $201 and in October, a strike 29.00 covered call offers $297 in premium.

The annualized return by writing covered calls in August is 15.91%, in September is 14.56% and in October is 13.83%.

Chart for MS


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $95.00 using 300 shares is offering an income potential of $558. In September, a strike 95.00 covered call offers $708 and in November, a strike 95.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in August is 22.30%, in September is 15.39% and in November is 12.55%.

Chart for UNP

An August covered call on UPS at strike $115.00 using 300 shares is offering an income potential of $87. In September, a strike 115.00 covered call offers $165 and in October, a strike 115.00 covered call offers $327 in premium.

The annualized return by writing covered calls in August is 2.90%, in September is 2.98% and in October is 3.77%.

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 $510. In September, a strike 80.00 covered call offers $690 and in December, a strike 80.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in August is 24.48%, in September is 18.06% and in December is 12.89%.

Chart for LYB

An August covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $645. In November, a strike 110.00 covered call offers $1,380 and in February, a strike 110.00 covered call offers $1,680 in premium.

The annualized return by writing covered calls in August is 22.19%, in November is 12.93% and in February is 9.17%.

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 $330. In November, a strike 70.00 covered call offers $660 and in January, a strike 70.00 covered call offers $840 in premium.

The annualized return by writing covered calls in August is 17.67%, in November is 9.56% and in January is 8.14%.

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 $210 in premium.

The annualized return by writing covered calls in November is 12.19% and in February is 10.01%.

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 September, a strike 32.00 covered call offers $165 and in October, a strike 31.00 covered call offers $315 in premium.

The annualized return by writing covered calls in August is 33.16%, in September is 10.84% and in October is 13.37%.

Chart for CTL

An August covered call on TMUS at strike $45.00 using 300 shares is offering an income potential of $348. In September, a strike 47.00 covered call offers $228 and in November, a strike 45.00 covered call offers $735 in premium.

The annualized return by writing covered calls in August is 29.69%, in September is 10.43% and in November is 17.20%.

Chart for TMUS

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

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