Income Alerts Newsletter for 07/29/2016

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 1.29% return, which annualizes at a rate of 20.41%.

Chart for QQQ

The DIA options at strike $184.50 for August 20 2016 are offering a 0.88% 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 1.00% return, which annualizes at a rate of 15.82%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $62.50 using 300 shares is offering an income potential of $294. In September, a strike 62.50 covered call offers $426 and in October, a strike 62.50 covered call offers $600 in premium.

The annualized return by writing covered calls in August is 25.31%, in September is 16.66% and in October is 14.05%.

Chart for QCOM

An August covered call on BABA at strike $83.50 using 300 shares is offering an income potential of $711. In September, a strike 85.00 covered call offers $696 and in October, a strike 85.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in August is 46.58%, in September is 20.55% and in October is 17.82%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on SLB at strike $79.50 using 300 shares is offering an income potential of $438. In September, a strike 80.00 covered call offers $594 and in November, a strike 80.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in August is 29.86%, in September is 18.39% and in November is 14.17%.

Chart for SLB

An August covered call on APC at strike $53.50 using 300 shares is offering an income potential of $549. In September, a strike 55.00 covered call offers $630 and in November, a strike 55.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in August is 56.36%, in September is 29.32% and in November is 23.86%.

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 $285. In September, a strike 125.00 covered call offers $444 and in October, a strike 125.00 covered call offers $717 in premium.

The annualized return by writing covered calls in August is 12.21%, in September is 8.61% and in October is 8.31%.

Chart for JNJ

An August covered call on MRK at strike $58.50 using 300 shares is offering an income potential of $291. In September, a strike 60.00 covered call offers $177 and in October, a strike 60.00 covered call offers $264 in premium.

The annualized return by writing covered calls in August is 26.79%, in September is 7.30% and in October is 6.49%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An August covered call on PEP at strike $109.00 using 300 shares is offering an income potential of $246. In September, a strike 110.00 covered call offers $258 and in October, a strike 110.00 covered call offers $471 in premium.

The annualized return by writing covered calls in August is 12.13%, in September is 5.74% and in October is 6.25%.

Chart for PEP

An August covered call on ADM at strike $45.00 using 300 shares is offering an income potential of $303. In September, a strike 45.00 covered call offers $405 and in December, a strike 45.00 covered call offers $714 in premium.

The annualized return by writing covered calls in August is 36.49%, in September is 22.17% and in December is 14.37%.

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 $276. In September, a strike 70.00 covered call offers $195 and in October, a strike 70.00 covered call offers $321 in premium.

The annualized return by writing covered calls in August is 21.81%, in September is 6.92% and in October is 6.80%.

Chart for CMCSA

An August covered call on GM at strike $31.00 using 300 shares is offering an income potential of $195. In September, a strike 31.00 covered call offers $276 and in December, a strike 31.00 covered call offers $468 in premium.

The annualized return by writing covered calls in August is 34.00%, in September is 21.90% and in December is 13.63%.

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 $330 in premium.

The annualized return by writing covered calls in August is 12.29%, in September is 8.58% and in October is 9.93%.

Chart for WFC

An August covered call on AXP at strike $65.00 using 300 shares is offering an income potential of $285. In September, a strike 65.00 covered call offers $483 and in October, a strike 65.00 covered call offers $699 in premium.

The annualized return by writing covered calls in August is 23.62%, in September is 18.24% and in October is 15.83%.

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 $447. In September, a strike 95.00 covered call offers $441 and in October, a strike 95.00 covered call offers $729 in premium.

The annualized return by writing covered calls in August is 25.82%, in September is 11.48% and in October is 11.38%.

Chart for UNP

An August covered call on UTX at strike $108.00 using 300 shares is offering an income potential of $363. In September, a strike 110.00 covered call offers $285 and in November, a strike 110.00 covered call offers $717 in premium.

The annualized return by writing covered calls in August is 18.05%, in September is 6.38% and in November is 7.27%.

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 $876. In September, a strike 110.00 covered call offers $915 and in October, a strike 110.00 covered call offers $1,275 in premium.

The annualized return by writing covered calls in August is 44.90%, in September is 21.18% and in October is 17.71%.

Chart for MON

An August covered call on DOW at strike $54.00 using 300 shares is offering an income potential of $222. In September, a strike 55.00 covered call offers $234 and in December, a strike 55.00 covered call offers $660 in premium.

The annualized return by writing covered calls in August is 22.19%, in September is 10.55% and in December is 10.99%.

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 $90. In September, a strike 24.00 covered call offers $120 and in November, a strike 24.00 covered call offers $210 in premium.

The annualized return by writing covered calls in August is 20.28%, in September is 12.25% and in November is 9.71%.

Chart for CNP

An August covered call on ED at strike $80.00 using 300 shares is offering an income potential of $390. In September, a strike 80.00 covered call offers $510 and in November, a strike 80.00 covered call offers $795 in premium.

The annualized return by writing covered calls in August is 26.25%, in September is 15.56% and in November is 10.99%.

Chart for ED


Telecommunications Focus: Income Opportunities

An August covered call on VOD at strike $31.00 using 300 shares is offering an income potential of $141. In September, a strike 31.00 covered call offers $240 and in October, a strike 31.00 covered call offers $333 in premium.

The annualized return by writing covered calls in August is 24.60%, in September is 19.09% and in October is 15.87%.

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 $315 in premium.

The annualized return by writing covered calls in August is 42.28%, in September is 21.52% and in October is 14.96%.

Chart for CTL

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

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