Income Alerts Newsletter for 08/04/2016

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 $115.50 for August 26 2016 are offering a 1.18% return, which annualizes at a rate of 18.79%.

Chart for QQQ

The DIA options at strike $183.50 for August 26 2016 are offering a 0.85% return, which annualizes at a rate of 13.44%.

Chart for DIA

The SPY options at strike $216.50 for August 26 2016 are offering a 0.97% return, which annualizes at a rate of 15.34%.

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 $186. In September, a strike 62.50 covered call offers $216 and in October, a strike 62.50 covered call offers $381 in premium.

The annualized return by writing covered calls in August is 22.04%, in September is 9.69% and in October is 9.70%.

Chart for QCOM

An August covered call on BABA at strike $84.00 using 300 shares is offering an income potential of $639. In September, a strike 85.00 covered call offers $738 and in October, a strike 85.00 covered call offers $990 in premium.

The annualized return by writing covered calls in August is 56.09%, in September is 24.57% and in October is 18.73%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on EOG at strike $82.50 using 300 shares is offering an income potential of $627. In September, a strike 82.50 covered call offers $975 and in October, a strike 82.50 covered call offers $1,305 in premium.

The annualized return by writing covered calls in August is 55.90%, in September is 33.32% and in October is 25.44%.

Chart for EOG

An August covered call on SLB at strike $80.00 using 300 shares is offering an income potential of $351. In September, a strike 80.00 covered call offers $597 and in November, a strike 80.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in August is 32.02%, in September is 20.79% and in November is 16.00%.

Chart for SLB


Healthcare Focus: Income Opportunities

An August covered call on JNJ at strike $124.00 using 300 shares is offering an income potential of $267. In September, a strike 125.00 covered call offers $327 and in October, a strike 125.00 covered call offers $633 in premium.

The annualized return by writing covered calls in August is 15.53%, in September is 7.20% and in October is 7.90%.

Chart for JNJ

An August covered call on MCK at strike $200.00 using 300 shares is offering an income potential of $210. In September, a strike 200.00 covered call offers $705 and in November, a strike 200.00 covered call offers $1,830 in premium.

The annualized return by writing covered calls in August is 7.73%, in September is 9.89% and in November is 10.91%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

An August covered call on ADM at strike $44.00 using 300 shares is offering an income potential of $174. In September, a strike 44.00 covered call offers $327 and in December, a strike 44.00 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 28.73%, in September is 20.64% and in December is 19.67%.

Chart for ADM

An August covered call on CVS at strike $97.50 using 300 shares is offering an income potential of $348. In September, a strike 100.00 covered call offers $276 and in November, a strike 100.00 covered call offers $657 in premium.

The annualized return by writing covered calls in August is 25.87%, in September is 7.73% and in November is 7.77%.

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 $231. In September, a strike 67.50 covered call offers $333 and in October, a strike 67.50 covered call offers $465 in premium.

The annualized return by writing covered calls in August is 25.02%, in September is 13.70% and in October is 10.83%.

Chart for CMCSA

An August covered call on DG at strike $94.00 using 300 shares is offering an income potential of $360. In September, a strike 95.00 covered call offers $705 and in November, a strike 95.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in August is 27.83%, in September is 20.85% and in November is 13.49%.

Chart for DG


Financials Focus: Income Opportunities

An August covered call on JPM at strike $65.00 using 300 shares is offering an income potential of $195. In September, a strike 65.00 covered call offers $402 and in October, a strike 65.00 covered call offers $582 in premium.

The annualized return by writing covered calls in August is 21.80%, in September is 17.17% and in October is 14.11%.

Chart for JPM

An August covered call on MS at strike $28.50 using 300 shares is offering an income potential of $147. In September, a strike 29.00 covered call offers $198 and in October, a strike 29.00 covered call offers $336 in premium.

The annualized return by writing covered calls in August is 37.67%, in September is 19.28% and in October is 18.72%.

Chart for MS


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $93.00 using 300 shares is offering an income potential of $411. In September, a strike 95.00 covered call offers $375 and in October, a strike 95.00 covered call offers $687 in premium.

The annualized return by writing covered calls in August is 32.15%, in September is 11.07% and in October is 11.53%.

Chart for UNP

An August covered call on UPS at strike $109.00 using 300 shares is offering an income potential of $165. In September, a strike 110.00 covered call offers $240 and in October, a strike 110.00 covered call offers $453 in premium.

The annualized return by writing covered calls in August is 10.96%, in September is 6.04% and in October is 6.45%.

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 $147. In September, a strike 13.00 covered call offers $192 and in October, a strike 13.00 covered call offers $291 in premium.

The annualized return by writing covered calls in August is 88.41%, in September is 44.18% and in October is 38.75%.

Chart for FCX

A September covered call on HUN at strike $16.00 using 300 shares is offering an income potential of $150. In November, a strike 16.00 covered call offers $300 in premium.

The annualized return by writing covered calls in September is 27.26% and in November is 23.50%.

Chart for HUN


Utilities Focus: Income Opportunities

An August covered call on NEE at strike $130.00 using 300 shares is offering an income potential of $195. In September, a strike 130.00 covered call offers $375 and in December, a strike 130.00 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 10.95%, in September is 7.99% and in December is 6.44%.

Chart for NEE

A September covered call on AEP at strike $70.00 using 300 shares is offering an income potential of $150. In November, a strike 70.00 covered call offers $390 in premium.

The annualized return by writing covered calls in September is 5.97% and in November is 6.54%.

Chart for AEP


Telecommunications Focus: Income Opportunities

An August covered call on VOD at strike $31.50 using 300 shares is offering an income potential of $105. In September, a strike 32.00 covered call offers $141 and in October, a strike 32.00 covered call offers $234 in premium.

The annualized return by writing covered calls in August is 24.37%, in September is 12.41% and in October is 11.70%.

Chart for VOD

An August covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $195. In September, a strike 31.00 covered call offers $210 and in October, a strike 31.00 covered call offers $270 in premium.

The annualized return by writing covered calls in August is 46.74%, in September is 19.05% and in October is 13.87%.

Chart for CTL

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

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