Income Alerts Newsletter for 07/28/2016

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 $115.00 for August 20 2016 are offering a 1.23% return, which annualizes at a rate of 18.68%.

Chart for QQQ

The DIA options at strike $185.00 for August 20 2016 are offering a 0.91% return, which annualizes at a rate of 13.89%.

Chart for DIA

The SPY options at strike $217.00 for August 20 2016 are offering a 0.91% return, which annualizes at a rate of 13.82%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $63.00 using 300 shares is offering an income potential of $234. In September, a strike 65.00 covered call offers $120 and in October, a strike 65.00 covered call offers $291 in premium.

The annualized return by writing covered calls in August is 19.22%, in September is 4.52% and in October is 6.61%.

Chart for QCOM

An August covered call on BABA at strike $83.50 using 300 shares is offering an income potential of $702. In September, a strike 85.00 covered call offers $720 and in October, a strike 85.00 covered call offers $975 in premium.

The annualized return by writing covered calls in August is 44.07%, in September is 20.88% and in October is 17.08%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on SLB at strike $80.00 using 300 shares is offering an income potential of $498. In September, a strike 80.00 covered call offers $717 and in November, a strike 80.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in August is 32.28%, in September is 21.65% and in November is 15.85%.

Chart for SLB

An August covered call on APC at strike $54.00 using 300 shares is offering an income potential of $534. In September, a strike 55.00 covered call offers $678 and in November, a strike 55.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in August is 52.04%, in September is 30.78% and in November is 24.46%.

Chart for APC


Healthcare Focus: Income Opportunities

An August covered call on JNJ at strike $125.00 using 300 shares is offering an income potential of $351. In September, a strike 125.00 covered call offers $531 and in October, a strike 125.00 covered call offers $798 in premium.

The annualized return by writing covered calls in August is 14.40%, in September is 10.10% and in October is 9.14%.

Chart for JNJ

An August covered call on MRK at strike $59.00 using 300 shares is offering an income potential of $249. In September, a strike 60.00 covered call offers $204 and in October, a strike 60.00 covered call offers $294 in premium.

The annualized return by writing covered calls in August is 21.85%, in September is 8.24% and in October is 7.14%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An August covered call on PEP at strike $108.00 using 300 shares is offering an income potential of $321. In September, a strike 110.00 covered call offers $240 and in October, a strike 110.00 covered call offers $423 in premium.

The annualized return by writing covered calls in August is 15.29%, in September is 5.26% and in October is 5.58%.

Chart for PEP

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 $432 and in December, a strike 44.00 covered call offers $705 in premium.

The annualized return by writing covered calls in August is 36.18%, in September is 23.81% and in December is 14.44%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

An August covered call on CMCSA at strike $68.00 using 300 shares is offering an income potential of $303. In September, a strike 70.00 covered call offers $201 and in October, a strike 70.00 covered call offers $330 in premium.

The annualized return by writing covered calls in August is 22.96%, in September is 6.99% and in October is 6.91%.

Chart for CMCSA

An August covered call on GM at strike $32.50 using 300 shares is offering an income potential of $114. In September, a strike 33.00 covered call offers $126 and in December, a strike 33.00 covered call offers $324 in premium.

The annualized return by writing covered calls in August is 18.27%, in September is 9.33% and in December is 8.91%.

Chart for GM


Financials Focus: Income Opportunities

An August covered call on WFC at strike $48.50 using 300 shares is offering an income potential of $111. In September, a strike 49.00 covered call offers $171 and in October, a strike 49.00 covered call offers $318 in premium.

The annualized return by writing covered calls in August is 11.81%, in September is 8.44% and in October is 9.47%.

Chart for WFC

An August covered call on AXP at strike $65.00 using 300 shares is offering an income potential of $264. In September, a strike 65.00 covered call offers $453 and in October, a strike 65.00 covered call offers $684 in premium.

The annualized return by writing covered calls in August is 21.01%, in September is 16.80% and in October is 15.35%.

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 $486. In September, a strike 92.50 covered call offers $600 and in October, a strike 92.50 covered call offers $882 in premium.

The annualized return by writing covered calls in August is 27.37%, in September is 15.66% and in October is 13.91%.

Chart for UNP

An August covered call on UTX at strike $108.00 using 300 shares is offering an income potential of $366. In September, a strike 110.00 covered call offers $303 and in November, a strike 110.00 covered call offers $765 in premium.

The annualized return by writing covered calls in August is 17.43%, in September is 6.65% and in November is 7.70%.

Chart for UTX


Materials Focus: Income Opportunities

An August covered call on MON at strike $107.00 using 300 shares is offering an income potential of $1,005. In September, a strike 110.00 covered call offers $975 and in October, a strike 110.00 covered call offers $1,275 in premium.

The annualized return by writing covered calls in August is 49.27%, in September is 22.04% and in October is 17.40%.

Chart for MON

An August covered call on DOW at strike $54.00 using 300 shares is offering an income potential of $273. In September, a strike 55.00 covered call offers $273 and in December, a strike 55.00 covered call offers $621 in premium.

The annualized return by writing covered calls in August is 26.25%, in September is 12.12% and in December is 10.25%.

Chart for DOW


Utilities Focus: Income Opportunities

An August covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $105. In September, a strike 24.00 covered call offers $150 and in November, a strike 24.00 covered call offers $240 in premium.

The annualized return by writing covered calls in August is 22.60%, in September is 15.00% and in November is 10.99%.

Chart for CNP

An August covered call on ED at strike $80.00 using 300 shares is offering an income potential of $300. In September, a strike 80.00 covered call offers $450 and in November, a strike 80.00 covered call offers $765 in premium.

The annualized return by writing covered calls in August is 19.39%, in September is 13.51% and in November is 10.53%.

Chart for ED


Telecommunications Focus: Income Opportunities

An August covered call on VOD at strike $31.50 using 300 shares is offering an income potential of $126. In September, a strike 32.00 covered call offers $156 and in October, a strike 32.00 covered call offers $240 in premium.

The annualized return by writing covered calls in August is 20.81%, in September is 11.93% and in October is 11.07%.

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 $225 and in October, a strike 31.00 covered call offers $270 in premium.

The annualized return by writing covered calls in August is 38.07%, in September is 17.57% and in October is 12.67%.

Chart for CTL

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

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