Income Alerts Newsletter for 08/03/2016

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 26 2016 are offering a 1.33% return, which annualizes at a rate of 20.24%.

Chart for QQQ

The DIA options at strike $183.00 for August 26 2016 are offering a 1.01% return, which annualizes at a rate of 15.36%.

Chart for DIA

The SPY options at strike $216.00 for August 26 2016 are offering a 1.06% return, which annualizes at a rate of 16.19%.

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 $225. In September, a strike 62.50 covered call offers $201 and in October, a strike 62.50 covered call offers $357 in premium.

The annualized return by writing covered calls in August is 25.41%, in September is 8.87% and in October is 9.03%.

Chart for QCOM

An August covered call on BABA at strike $84.00 using 300 shares is offering an income potential of $654. In September, a strike 85.00 covered call offers $747 and in October, a strike 85.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in August is 54.16%, in September is 24.30% and in October is 19.06%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on SLB at strike $79.00 using 300 shares is offering an income potential of $432. In September, a strike 80.00 covered call offers $525 and in November, a strike 80.00 covered call offers $990 in premium.

The annualized return by writing covered calls in August is 37.70%, in September is 18.00% and in November is 14.62%.

Chart for SLB

An August covered call on VLO at strike $52.50 using 300 shares is offering an income potential of $309. In September, a strike 52.50 covered call offers $525 and in December, a strike 52.50 covered call offers $945 in premium.

The annualized return by writing covered calls in August is 40.70%, in September is 27.44% and in December is 17.06%.

Chart for VLO


Healthcare Focus: Income Opportunities

An August covered call on PFE at strike $36.50 using 300 shares is offering an income potential of $90. In September, a strike 37.00 covered call offers $120 and in October, a strike 37.00 covered call offers $198 in premium.

The annualized return by writing covered calls in August is 16.86%, in September is 8.82% and in October is 8.32%.

Chart for PFE

An August covered call on JNJ at strike $125.00 using 300 shares is offering an income potential of $270. In September, a strike 125.00 covered call offers $465 and in October, a strike 125.00 covered call offers $783 in premium.

The annualized return by writing covered calls in August is 14.72%, in September is 9.97% and in October is 9.62%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

An August covered call on ADM at strike $43.50 using 300 shares is offering an income potential of $204. In September, a strike 44.00 covered call offers $276 and in December, a strike 44.00 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 32.24%, in September is 17.16% and in December is 19.76%.

Chart for ADM

An August covered call on CVS at strike $98.50 using 300 shares is offering an income potential of $357. In September, a strike 100.00 covered call offers $390 and in November, a strike 100.00 covered call offers $780 in premium.

The annualized return by writing covered calls in August is 24.91%, in September is 10.66% and in November is 9.12%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An August covered call on CMCSA at strike $67.00 using 300 shares is offering an income potential of $279. In September, a strike 67.50 covered call offers $381 and in October, a strike 67.50 covered call offers $516 in premium.

The annualized return by writing covered calls in August is 28.59%, in September is 15.35% and in October is 11.89%.

Chart for CMCSA

An August covered call on DG at strike $93.50 using 300 shares is offering an income potential of $360. In September, a strike 95.00 covered call offers $630 and in November, a strike 95.00 covered call offers $990 in premium.

The annualized return by writing covered calls in August is 26.46%, in September is 18.30% and in November is 12.30%.

Chart for DG


Financials Focus: Income Opportunities

An August covered call on JPM at strike $64.00 using 300 shares is offering an income potential of $237. In September, a strike 65.00 covered call offers $300 and in October, a strike 65.00 covered call offers $495 in premium.

The annualized return by writing covered calls in August is 25.48%, in September is 12.67% and in October is 11.99%.

Chart for JPM

An August covered call on MS at strike $28.50 using 300 shares is offering an income potential of $99. In September, a strike 29.00 covered call offers $156 and in October, a strike 29.00 covered call offers $288 in premium.

The annualized return by writing covered calls in August is 24.18%, in September is 15.01% and in October is 16.00%.

Chart for MS


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $91.50 using 300 shares is offering an income potential of $450. In September, a strike 92.50 covered call offers $525 and in October, a strike 92.50 covered call offers $843 in premium.

The annualized return by writing covered calls in August is 33.87%, in September is 15.51% and in October is 14.31%.

Chart for UNP

An August covered call on UPS at strike $108.00 using 300 shares is offering an income potential of $210. In September, a strike 110.00 covered call offers $189 and in October, a strike 110.00 covered call offers $375 in premium.

The annualized return by writing covered calls in August is 13.30%, in September is 4.68% and in October is 5.30%.

Chart for UPS


Materials Focus: Income Opportunities

An August covered call on FCX at strike $12.50 using 300 shares is offering an income potential of $159. In September, a strike 13.00 covered call offers $204 and in October, a strike 13.00 covered call offers $306 in premium.

The annualized return by writing covered calls in August is 90.54%, in September is 46.04% and in October is 40.39%.

Chart for FCX

An August covered call on MON at strike $106.00 using 300 shares is offering an income potential of $768. In September, a strike 110.00 covered call offers $840 and in October, a strike 110.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in August is 50.37%, in September is 21.61% and in October is 16.59%.

Chart for MON


Utilities Focus: Income Opportunities

An August covered call on NEE at strike $130.00 using 300 shares is offering an income potential of $180. In September, a strike 130.00 covered call offers $360 and in December, a strike 130.00 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 9.58%, in September is 7.53% and in December is 6.41%.

Chart for NEE

An August covered call on AEP at strike $70.00 using 300 shares is offering an income potential of $75. In September, a strike 70.00 covered call offers $225 and in November, a strike 70.00 covered call offers $465 in premium.

The annualized return by writing covered calls in August is 7.37%, in September is 8.72% and in November is 7.69%.

Chart for AEP


Telecommunications Focus: Income Opportunities

An August covered call on VOD at strike $31.00 using 300 shares is offering an income potential of $120. In September, a strike 31.00 covered call offers $222 and in October, a strike 31.00 covered call offers $348 in premium.

The annualized return by writing covered calls in August is 26.70%, in September is 19.55% and in October is 17.65%.

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 $285 in premium.

The annualized return by writing covered calls in August is 54.46%, in September is 24.05% and in October is 14.44%.

Chart for CTL

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

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