Income Alerts Newsletter for 07/26/2016

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 $114.00 for August 20 2016 are offering a 1.16% return, which annualizes at a rate of 16.24%.

Chart for QQQ

The DIA options at strike $185.00 for August 20 2016 are offering a 0.94% return, which annualizes at a rate of 13.19%.

Chart for DIA

The SPY options at strike $217.00 for August 20 2016 are offering a 1.01% return, which annualizes at a rate of 14.14%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $61.00 using 300 shares is offering an income potential of $279. In September, a strike 62.50 covered call offers $219 and in October, a strike 62.50 covered call offers $363 in premium.

The annualized return by writing covered calls in August is 21.89%, in September is 8.24% and in October is 8.36%.

Chart for QCOM

An August covered call on BABA at strike $83.50 using 300 shares is offering an income potential of $666. In September, a strike 85.00 covered call offers $711 and in October, a strike 85.00 covered call offers $960 in premium.

The annualized return by writing covered calls in August is 38.49%, in September is 19.82% and in October is 16.41%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on SLB at strike $81.00 using 300 shares is offering an income potential of $462. In September, a strike 82.50 covered call offers $468 and in November, a strike 82.50 covered call offers $894 in premium.

The annualized return by writing covered calls in August is 27.31%, in September is 13.32% and in November is 11.96%.

Chart for SLB

An August covered call on APC at strike $54.00 using 300 shares is offering an income potential of $651. In September, a strike 55.00 covered call offers $771 and in November, a strike 55.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in August is 58.92%, in September is 33.86% and in November is 24.68%.

Chart for APC


Healthcare Focus: Income Opportunities

An August covered call on HCA at strike $80.00 using 300 shares is offering an income potential of $540. In September, a strike 80.00 covered call offers $780 and in December, a strike 80.00 covered call offers $1,500 in premium.

The annualized return by writing covered calls in August is 32.44%, in September is 22.79% and in December is 16.85%.

Chart for HCA

An August covered call on JNJ at strike $125.00 using 300 shares is offering an income potential of $369. In September, a strike 125.00 covered call offers $540 and in October, a strike 125.00 covered call offers $807 in premium.

The annualized return by writing covered calls in August is 13.96%, in September is 9.88% and in October is 9.03%.

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 $363. In September, a strike 82.50 covered call offers $507 and in October, a strike 82.50 covered call offers $846 in premium.

The annualized return by writing covered calls in August is 21.14%, in September is 14.30% and in October is 14.69%.

Chart for WBA

An August covered call on ADM at strike $44.00 using 300 shares is offering an income potential of $264. In September, a strike 44.00 covered call offers $366 and in December, a strike 44.00 covered call offers $738 in premium.

The annualized return by writing covered calls in August is 28.92%, in September is 19.46% and in December is 15.05%.

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 $402. In September, a strike 67.50 covered call offers $546 and in October, a strike 67.50 covered call offers $690 in premium.

The annualized return by writing covered calls in August is 28.45%, in September is 18.74% and in October is 14.47%.

Chart for CMCSA

An August covered call on DG at strike $96.00 using 300 shares is offering an income potential of $480. In September, a strike 97.50 covered call offers $705 and in November, a strike 97.50 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 23.80%, in September is 16.96% and in November is 10.07%.

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 $132. In September, a strike 49.00 covered call offers $192 and in October, a strike 49.00 covered call offers $333 in premium.

The annualized return by writing covered calls in August is 12.95%, in September is 9.11% and in October is 9.68%.

Chart for WFC

An August covered call on AXP at strike $64.50 using 300 shares is offering an income potential of $315. In September, a strike 65.00 covered call offers $432 and in October, a strike 65.00 covered call offers $642 in premium.

The annualized return by writing covered calls in August is 23.29%, in September is 15.48% and in October is 14.11%.

Chart for AXP


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $92.50 using 300 shares is offering an income potential of $525. In September, a strike 92.50 covered call offers $705 and in November, a strike 92.50 covered call offers $1,170 in premium.

The annualized return by writing covered calls in August is 27.14%, in September is 17.66% and in November is 13.77%.

Chart for UNP

An August covered call on UTX at strike $105.00 using 300 shares is offering an income potential of $456. In September, a strike 105.00 covered call offers $633 and in November, a strike 105.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in August is 20.69%, in September is 13.91% and in November is 10.48%.

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 $195. In September, a strike 16.00 covered call offers $270 and in November, a strike 16.00 covered call offers $390 in premium.

The annualized return by writing covered calls in August is 60.07%, in September is 40.72% and in November is 27.89%.

Chart for HUN

An August covered call on LYB at strike $80.00 using 300 shares is offering an income potential of $435. In September, a strike 80.00 covered call offers $645 and in December, a strike 80.00 covered call offers $1,170 in premium.

The annualized return by writing covered calls in August is 26.29%, in September is 18.94% and in December is 13.09%.

Chart for LYB


Utilities Focus: Income Opportunities

An August covered call on CNP at strike $25.00 using 300 shares is offering an income potential of $75. In September, a strike 25.00 covered call offers $90 and in November, a strike 25.00 covered call offers $195 in premium.

The annualized return by writing covered calls in August is 14.47%, in September is 8.38% and in November is 8.50%.

Chart for CNP

An August covered call on D at strike $80.00 using 300 shares is offering an income potential of $180. In September, a strike 80.00 covered call offers $255 and in October, a strike 80.00 covered call offers $360 in premium.

The annualized return by writing covered calls in August is 10.80%, in September is 7.39% and in October is 6.36%.

Chart for D


Telecommunications Focus: Income Opportunities

An August covered call on VOD at strike $31.50 using 300 shares is offering an income potential of $156. In September, a strike 32.00 covered call offers $180 and in October, a strike 32.00 covered call offers $267 in premium.

The annualized return by writing covered calls in August is 23.69%, in September is 13.20% and in October is 11.99%.

Chart for VOD

An August covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $240. In September, a strike 31.00 covered call offers $270 and in October, a strike 31.00 covered call offers $330 in premium.

The annualized return by writing covered calls in August is 37.34%, in September is 20.29% and in October is 15.15%.

Chart for CTL

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

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.