Income Alerts Newsletter for 07/22/2016

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 $113.50 for August 12 2016 are offering a 1.14% return, which annualizes at a rate of 18.98%.

Chart for QQQ

The DIA options at strike $185.00 for August 12 2016 are offering a 0.97% return, which annualizes at a rate of 16.12%.

Chart for DIA

The SPY options at strike $216.50 for August 12 2016 are offering a 0.95% return, which annualizes at a rate of 15.80%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $60.00 using 300 shares is offering an income potential of $315. In September, a strike 60.00 covered call offers $438 and in October, a strike 60.00 covered call offers $588 in premium.

The annualized return by writing covered calls in August is 21.70%, in September is 15.71% and in October is 13.27%.

Chart for QCOM

An August covered call on BABA at strike $84.50 using 300 shares is offering an income potential of $756. In September, a strike 85.00 covered call offers $900 and in October, a strike 85.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in August is 37.55%, in September is 23.26% and in October is 18.55%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on HAL at strike $44.00 using 300 shares is offering an income potential of $336. In September, a strike 44.00 covered call offers $492 and in October, a strike 44.00 covered call offers $666 in premium.

The annualized return by writing covered calls in August is 32.12%, in September is 24.63% and in October is 21.09%.

Chart for HAL

An August covered call on OXY at strike $76.00 using 300 shares is offering an income potential of $474. In September, a strike 77.50 covered call offers $384 and in November, a strike 77.50 covered call offers $708 in premium.

The annualized return by writing covered calls in August is 25.92%, in September is 10.82% and in November is 9.70%.

Chart for OXY


Healthcare Focus: Income Opportunities

An August covered call on HCA at strike $81.00 using 300 shares is offering an income potential of $615. In September, a strike 82.50 covered call offers $585 and in December, a strike 82.50 covered call offers $1,230 in premium.

The annualized return by writing covered calls in August is 31.74%, in September is 15.60% and in December is 13.12%.

Chart for HCA

An August covered call on JNJ at strike $126.00 using 300 shares is offering an income potential of $276. In September, a strike 130.00 covered call offers $99 and in October, a strike 130.00 covered call offers $276 in premium.

The annualized return by writing covered calls in August is 9.01%, in September is 1.66% and in October is 2.91%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

An August covered call on WBA at strike $82.00 using 300 shares is offering an income potential of $447. In September, a strike 82.50 covered call offers $591 and in October, a strike 82.50 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 22.60%, in September is 15.55% and in October is 14.96%.

Chart for WBA

An August covered call on ADM at strike $43.50 using 300 shares is offering an income potential of $300. In September, a strike 44.00 covered call offers $336 and in December, a strike 44.00 covered call offers $738 in premium.

The annualized return by writing covered calls in August is 28.70%, in September is 16.67% and in December is 14.72%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

An August covered call on CMCSA at strike $67.50 using 300 shares is offering an income potential of $360. In September, a strike 67.50 covered call offers $489 and in October, a strike 67.50 covered call offers $606 in premium.

The annualized return by writing covered calls in August is 22.18%, in September is 15.69% and in October is 12.20%.

Chart for CMCSA

An August covered call on DG at strike $94.50 using 300 shares is offering an income potential of $420. In September, a strike 95.00 covered call offers $825 and in November, a strike 95.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in August is 18.39%, in September is 18.96% and in November is 12.70%.

Chart for DG


Financials Focus: Income Opportunities

An August covered call on WFC at strike $48.50 using 300 shares is offering an income potential of $195. In September, a strike 49.00 covered call offers $240 and in October, a strike 49.00 covered call offers $396 in premium.

The annualized return by writing covered calls in August is 16.60%, in September is 10.60% and in October is 11.03%.

Chart for WFC

An August covered call on AXP at strike $63.50 using 300 shares is offering an income potential of $348. In September, a strike 65.00 covered call offers $327 and in October, a strike 65.00 covered call offers $525 in premium.

The annualized return by writing covered calls in August is 22.66%, in September is 11.00% and in October is 11.14%.

Chart for AXP


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $92.00 using 300 shares is offering an income potential of $498. In September, a strike 92.50 covered call offers $621 and in November, a strike 92.50 covered call offers $1,080 in premium.

The annualized return by writing covered calls in August is 22.62%, in September is 14.66% and in November is 12.44%.

Chart for UNP

An August covered call on UTX at strike $106.00 using 300 shares is offering an income potential of $537. In September, a strike 110.00 covered call offers $237 and in November, a strike 110.00 covered call offers $552 in premium.

The annualized return by writing covered calls in August is 20.93%, in September is 4.73% and in November is 5.34%.

Chart for UTX


Materials Focus: Income Opportunities

An August covered call on HUN at strike $16.00 using 300 shares is offering an income potential of $210. In September, a strike 16.00 covered call offers $270 and in November, a strike 16.00 covered call offers $405 in premium.

The annualized return by writing covered calls in August is 56.07%, in September is 37.78% and in November is 28.01%.

Chart for HUN

An August covered call on LYB at strike $80.00 using 300 shares is offering an income potential of $555. In September, a strike 80.00 covered call offers $720 and in December, a strike 80.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in August is 29.14%, in September is 19.69% and in December is 14.08%.

Chart for LYB


Utilities Focus: Income Opportunities

A November covered call on CNP at strike $25.00 using 300 shares is offering an income potential of $165.

The annualized return by writing covered calls in November is 7.00%.

Chart for CNP

An August covered call on D at strike $80.00 using 300 shares is offering an income potential of $90. In September, a strike 80.00 covered call offers $165 and in October, a strike 80.00 covered call offers $240 in premium.

The annualized return by writing covered calls in August is 4.72%, in September is 4.49% and in October is 4.09%.

Chart for D


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 September, a strike 31.00 covered call offers $255 and in October, a strike 31.00 covered call offers $285 in premium.

The annualized return by writing covered calls in August is 28.45%, in September is 17.96% and in October is 12.56%.

Chart for CTL

An August covered call on VZ at strike $55.50 using 300 shares is offering an income potential of $285. In September, a strike 57.50 covered call offers $144 and in October, a strike 57.50 covered call offers $204 in premium.

The annualized return by writing covered calls in August is 21.24%, in September is 5.50% and in October is 4.88%.

Chart for VZ

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

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