Income Alerts Newsletter for 07/27/2016

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 1.28% return, which annualizes at a rate of 18.71%.

Chart for QQQ

The DIA options at strike $185.00 for August 20 2016 are offering a 0.85% return, which annualizes at a rate of 12.44%.

Chart for DIA

The SPY options at strike $217.00 for August 20 2016 are offering a 1.03% return, which annualizes at a rate of 15.11%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $61.50 using 300 shares is offering an income potential of $294. In September, a strike 62.50 covered call offers $276 and in October, a strike 62.50 covered call offers $432 in premium.

The annualized return by writing covered calls in August is 23.70%, in September is 10.48% and in October is 9.97%.

Chart for QCOM

An August covered call on BABA at strike $84.00 using 300 shares is offering an income potential of $633. In September, a strike 85.00 covered call offers $783 and in October, a strike 85.00 covered call offers $1,035 in premium.

The annualized return by writing covered calls in August is 37.81%, in September is 22.20% and in October is 17.86%.

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 $429. In September, a strike 82.50 covered call offers $426 and in November, a strike 82.50 covered call offers $888 in premium.

The annualized return by writing covered calls in August is 26.37%, in September is 12.35% and in November is 12.00%.

Chart for SLB

An August covered call on APC at strike $55.00 using 300 shares is offering an income potential of $576. In September, a strike 55.00 covered call offers $840 and in November, a strike 55.00 covered call offers $1,305 in premium.

The annualized return by writing covered calls in August is 53.07%, in September is 37.13% and in November is 27.16%.

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 $765 and in December, a strike 80.00 covered call offers $1,500 in premium.

The annualized return by writing covered calls in August is 33.75%, in September is 22.77% and in December is 16.98%.

Chart for HCA

An August covered call on JNJ at strike $125.00 using 300 shares is offering an income potential of $402. In September, a strike 125.00 covered call offers $549 and in October, a strike 125.00 covered call offers $825 in premium.

The annualized return by writing covered calls in August is 15.83%, in September is 10.24% and in October is 9.34%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

An August covered call on ADM at strike $44.00 using 300 shares is offering an income potential of $306. In September, a strike 44.00 covered call offers $402 and in December, a strike 44.00 covered call offers $696 in premium.

The annualized return by writing covered calls in August is 34.75%, in September is 21.70% and in December is 14.15%.

Chart for ADM

An August covered call on PEP at strike $109.00 using 300 shares is offering an income potential of $258. In September, a strike 110.00 covered call offers $267 and in October, a strike 110.00 covered call offers $471 in premium.

The annualized return by writing covered calls in August is 11.70%, in September is 5.71% and in October is 6.11%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

An August covered call on CMCSA at strike $67.50 using 300 shares is offering an income potential of $318. In September, a strike 67.50 covered call offers $471 and in October, a strike 67.50 covered call offers $600 in premium.

The annualized return by writing covered calls in August is 23.41%, in September is 16.48% and in October is 12.73%.

Chart for CMCSA

An August covered call on DG at strike $97.00 using 300 shares is offering an income potential of $390. In September, a strike 97.50 covered call offers $825 and in November, a strike 97.50 covered call offers $1,140 in premium.

The annualized return by writing covered calls in August is 19.89%, in September is 20.16% and in November is 12.87%.

Chart for DG


Financials Focus: Income Opportunities

An August covered call on WFC at strike $48.00 using 300 shares is offering an income potential of $171. In September, a strike 48.00 covered call offers $291 and in October, a strike 48.00 covered call offers $456 in premium.

The annualized return by writing covered calls in August is 17.56%, in September is 14.21% and in October is 13.57%.

Chart for WFC

An August covered call on AXP at strike $64.50 using 300 shares is offering an income potential of $324. In September, a strike 65.00 covered call offers $411 and in October, a strike 65.00 covered call offers $636 in premium.

The annualized return by writing covered calls in August is 24.91%, in September is 14.98% and in October is 14.13%.

Chart for AXP


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $93.50 using 300 shares is offering an income potential of $405. In September, a strike 95.00 covered call offers $444 and in October, a strike 95.00 covered call offers $729 in premium.

The annualized return by writing covered calls in August is 21.50%, in September is 11.14% and in October is 11.13%.

Chart for UNP

An August covered call on UTX at strike $108.00 using 300 shares is offering an income potential of $402. In September, a strike 110.00 covered call offers $285 and in November, a strike 110.00 covered call offers $699 in premium.

The annualized return by writing covered calls in August is 18.36%, in September is 6.12% and in November is 6.95%.

Chart for UTX


Materials Focus: Income Opportunities

An August covered call on HUN at strike $17.00 using 300 shares is offering an income potential of $105. In September, a strike 17.00 covered call offers $165 and in November, a strike 17.00 covered call offers $315 in premium.

The annualized return by writing covered calls in August is 32.42%, in September is 24.34% and in November is 21.94%.

Chart for HUN

An August covered call on LYB at strike $80.00 using 300 shares is offering an income potential of $450. In September, a strike 80.00 covered call offers $675 and in December, a strike 80.00 covered call offers $1,230 in premium.

The annualized return by writing covered calls in August is 28.31%, in September is 20.23% and in December is 13.90%.

Chart for LYB


Utilities Focus: Income Opportunities

A September covered call on CNP at strike $25.00 using 300 shares is offering an income potential of $90. In November, a strike 25.00 covered call offers $165 in premium.

The annualized return by writing covered calls in September is 8.60% and in November is 7.28%.

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 $360 in premium.

The annualized return by writing covered calls in August is 5.67%, in September is 4.92% and in October is 6.52%.

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 $111. In September, a strike 32.00 covered call offers $144 and in October, a strike 32.00 covered call offers $234 in premium.

The annualized return by writing covered calls in August is 17.61%, in September is 10.81% and in October is 10.69%.

Chart for VOD

An August covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $225. In September, a strike 31.00 covered call offers $240 and in October, a strike 31.00 covered call offers $285 in premium.

The annualized return by writing covered calls in August is 36.65%, in September is 18.47% and in October is 13.28%.

Chart for CTL

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

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