Income Alerts Newsletter for 08/02/2016

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 $116.00 for August 26 2016 are offering a 1.13% return, which annualizes at a rate of 16.57%.

Chart for QQQ

The DIA options at strike $184.00 for August 26 2016 are offering a 0.89% return, which annualizes at a rate of 12.98%.

Chart for DIA

The SPY options at strike $217.00 for August 26 2016 are offering a 1.04% return, which annualizes at a rate of 15.16%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $62.00 using 300 shares is offering an income potential of $258. In September, a strike 62.50 covered call offers $333 and in October, a strike 62.50 covered call offers $498 in premium.

The annualized return by writing covered calls in August is 27.09%, in September is 14.19% and in October is 12.28%.

Chart for QCOM

An August covered call on BABA at strike $84.50 using 300 shares is offering an income potential of $669. In September, a strike 85.00 covered call offers $825 and in October, a strike 85.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in August is 52.17%, in September is 26.18% and in October is 20.42%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on SLB at strike $78.50 using 300 shares is offering an income potential of $453. In September, a strike 80.00 covered call offers $468 and in November, a strike 80.00 covered call offers $915 in premium.

The annualized return by writing covered calls in August is 37.70%, in September is 15.75% and in November is 13.42%.

Chart for SLB

An August covered call on VLO at strike $52.00 using 300 shares is offering an income potential of $255. In September, a strike 52.50 covered call offers $420 and in December, a strike 52.50 covered call offers $840 in premium.

The annualized return by writing covered calls in August is 32.16%, in September is 21.65% and in December is 15.17%.

Chart for VLO


Healthcare Focus: Income Opportunities

An August covered call on JNJ at strike $126.00 using 300 shares is offering an income potential of $216. In October, a strike 130.00 covered call offers $258 in premium.

The annualized return by writing covered calls in August is 11.09% and in October is 3.07%.

Chart for JNJ

An August covered call on MRK at strike $59.00 using 300 shares is offering an income potential of $192. In September, a strike 60.00 covered call offers $171 and in October, a strike 60.00 covered call offers $264 in premium.

The annualized return by writing covered calls in August is 21.19%, in September is 7.62% and in October is 6.78%.

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 $306. In September, a strike 110.00 covered call offers $303 and in October, a strike 110.00 covered call offers $540 in premium.

The annualized return by writing covered calls in August is 18.16%, in September is 7.27% and in October is 7.48%.

Chart for PEP

An August covered call on ADM at strike $44.50 using 300 shares is offering an income potential of $255. In September, a strike 45.00 covered call offers $300 and in December, a strike 45.00 covered call offers $741 in premium.

The annualized return by writing covered calls in August is 37.63%, in September is 17.96% and in December is 15.64%.

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 $198. In September, a strike 70.00 covered call offers $138 and in October, a strike 70.00 covered call offers $267 in premium.

The annualized return by writing covered calls in August is 18.96%, in September is 5.33% and in October is 5.94%.

Chart for CMCSA

An August covered call on GM at strike $31.50 using 300 shares is offering an income potential of $138. In September, a strike 32.00 covered call offers $171 and in December, a strike 32.00 covered call offers $372 in premium.

The annualized return by writing covered calls in August is 28.65%, in September is 14.40% and in December is 10.91%.

Chart for GM


Financials Focus: Income Opportunities

An August covered call on AXP at strike $64.50 using 300 shares is offering an income potential of $243. In September, a strike 65.00 covered call offers $372 and in October, a strike 65.00 covered call offers $597 in premium.

The annualized return by writing covered calls in August is 24.57%, in September is 15.31% and in October is 14.25%.

Chart for AXP

An October covered call on BAC at strike $15.00 using 300 shares is offering an income potential of $108.

The annualized return by writing covered calls in October is 11.47%.

Chart for BAC


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $93.50 using 300 shares is offering an income potential of $393. In September, a strike 95.00 covered call offers $405 and in October, a strike 95.00 covered call offers $723 in premium.

The annualized return by writing covered calls in August is 27.43%, in September is 11.43% and in October is 11.83%.

Chart for UNP

An August covered call on UTX at strike $107.00 using 300 shares is offering an income potential of $318. In September, a strike 110.00 covered call offers $198 and in November, a strike 110.00 covered call offers $606 in premium.

The annualized return by writing covered calls in August is 19.23%, in September is 4.82% and in November is 6.39%.

Chart for UTX


Materials Focus: Income Opportunities

An August covered call on MON at strike $106.00 using 300 shares is offering an income potential of $795. In September, a strike 110.00 covered call offers $852 and in October, a strike 110.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in August is 49.35%, in September is 21.42% and in October is 17.49%.

Chart for MON

An August covered call on DOW at strike $54.00 using 300 shares is offering an income potential of $192. In September, a strike 55.00 covered call offers $234 and in December, a strike 55.00 covered call offers $645 in premium.

The annualized return by writing covered calls in August is 23.19%, in September is 11.46% and in December is 11.04%.

Chart for DOW


Utilities Focus: Income Opportunities

A September covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $105. In November, a strike 24.00 covered call offers $195 in premium.

The annualized return by writing covered calls in September is 11.66% and in November is 9.37%.

Chart for CNP

An August covered call on ED at strike $82.50 using 300 shares is offering an income potential of $105. In September, a strike 82.50 covered call offers $240 and in November, a strike 82.50 covered call offers $510 in premium.

The annualized return by writing covered calls in August is 8.39%, in September is 7.80% and in November is 7.16%.

Chart for ED


Telecommunications Focus: Income Opportunities

An August covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $165. In September, a strike 32.00 covered call offers $195 and in October, a strike 32.00 covered call offers $210 in premium.

The annualized return by writing covered calls in August is 34.68%, in September is 16.62% and in October is 10.28%.

Chart for CTL

An August covered call on VZ at strike $55.00 using 300 shares is offering an income potential of $120. In September, a strike 55.00 covered call offers $246 and in October, a strike 55.00 covered call offers $339 in premium.

The annualized return by writing covered calls in August is 14.20%, in September is 11.86% and in October is 9.42%.

Chart for VZ

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

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