Income Alerts Newsletter for 08/09/2016

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 $117.00 for September 2 2016 are offering a 1.01% return, which annualizes at a rate of 14.79%.

Chart for QQQ

The DIA options at strike $185.50 for September 2 2016 are offering a 0.70% return, which annualizes at a rate of 10.16%.

Chart for DIA

The SPY options at strike $218.50 for September 2 2016 are offering a 0.80% return, which annualizes at a rate of 11.74%.

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 $159. In September, a strike 62.50 covered call offers $240 and in October, a strike 62.50 covered call offers $423 in premium.

The annualized return by writing covered calls in August is 26.41%, in September is 12.01% and in October is 11.40%.

Chart for QCOM

An August covered call on BABA at strike $86.00 using 300 shares is offering an income potential of $501. In September, a strike 87.50 covered call offers $579 and in October, a strike 87.50 covered call offers $864 in premium.

The annualized return by writing covered calls in August is 60.96%, in September is 21.20% and in October is 17.07%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on EOG at strike $91.00 using 300 shares is offering an income potential of $462. In September, a strike 92.50 covered call offers $681 and in October, a strike 92.50 covered call offers $1,065 in premium.

The annualized return by writing covered calls in August is 52.56%, in September is 23.43% and in October is 19.83%.

Chart for EOG

An August covered call on HAL at strike $44.50 using 300 shares is offering an income potential of $216. In September, a strike 45.00 covered call offers $348 and in October, a strike 45.00 covered call offers $561 in premium.

The annualized return by writing covered calls in August is 50.30%, in September is 24.56% and in October is 21.47%.

Chart for HAL


Healthcare Focus: Income Opportunities

An August covered call on JNJ at strike $124.00 using 300 shares is offering an income potential of $177. In September, a strike 125.00 covered call offers $246 and in October, a strike 125.00 covered call offers $558 in premium.

The annualized return by writing covered calls in August is 14.58%, in September is 6.09% and in October is 7.43%.

Chart for JNJ

An August covered call on MCK at strike $200.00 using 300 shares is offering an income potential of $90. In September, a strike 200.00 covered call offers $540 and in November, a strike 200.00 covered call offers $1,650 in premium.

The annualized return by writing covered calls in August is 4.68%, in September is 8.50% and in November is 10.28%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

An August covered call on ADM at strike $45.00 using 300 shares is offering an income potential of $78. In September, a strike 45.00 covered call offers $237 and in December, a strike 45.00 covered call offers $588 in premium.

The annualized return by writing covered calls in August is 17.87%, in September is 16.48% and in December is 12.83%.

Chart for ADM

An August covered call on CVS at strike $97.50 using 300 shares is offering an income potential of $216. In September, a strike 100.00 covered call offers $186 and in November, a strike 100.00 covered call offers $567 in premium.

The annualized return by writing covered calls in August is 22.70%, in September is 5.86% and in November is 7.03%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An August covered call on GM at strike $31.00 using 300 shares is offering an income potential of $105. In September, a strike 31.00 covered call offers $204 and in December, a strike 31.00 covered call offers $426 in premium.

The annualized return by writing covered calls in August is 34.87%, in September is 20.55% and in December is 13.43%.

Chart for GM

An August covered call on CMCSA at strike $67.50 using 300 shares is offering an income potential of $153. In September, a strike 67.50 covered call offers $333 and in October, a strike 67.50 covered call offers $495 in premium.

The annualized return by writing covered calls in August is 23.31%, in September is 15.36% and in October is 12.27%.

Chart for CMCSA


Financials Focus: Income Opportunities

An August covered call on WFC at strike $49.00 using 300 shares is offering an income potential of $120. In September, a strike 49.00 covered call offers $276 and in October, a strike 49.00 covered call offers $453 in premium.

The annualized return by writing covered calls in August is 25.08%, in September is 17.49% and in October is 15.50%.

Chart for WFC

An August covered call on JPM at strike $66.50 using 300 shares is offering an income potential of $150. In September, a strike 67.50 covered call offers $240 and in October, a strike 67.50 covered call offers $420 in premium.

The annualized return by writing covered calls in August is 23.18%, in September is 11.18% and in October is 10.53%.

Chart for JPM


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $94.00 using 300 shares is offering an income potential of $342. In September, a strike 95.00 covered call offers $426 and in October, a strike 95.00 covered call offers $768 in premium.

The annualized return by writing covered calls in August is 37.40%, in September is 14.02% and in October is 13.65%.

Chart for UNP

An August covered call on UPS at strike $109.00 using 300 shares is offering an income potential of $168. In September, a strike 110.00 covered call offers $255 and in October, a strike 110.00 covered call offers $483 in premium.

The annualized return by writing covered calls in August is 15.71%, in September is 7.17% and in October is 7.30%.

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 $108. In September, a strike 13.00 covered call offers $159 and in October, a strike 13.00 covered call offers $264 in premium.

The annualized return by writing covered calls in August is 91.79%, in September is 41.12% and in October is 37.53%.

Chart for FCX

A September covered call on HUN at strike $17.00 using 300 shares is offering an income potential of $150. In November, a strike 17.00 covered call offers $300 in premium.

The annualized return by writing covered calls in September is 28.48% and in November is 22.83%.

Chart for HUN


Utilities Focus: Income Opportunities

A September covered call on NEE at strike $130.00 using 300 shares is offering an income potential of $180. In December, a strike 130.00 covered call offers $675 in premium.

The annualized return by writing covered calls in September is 4.37% and in December is 5.07%.

Chart for NEE

A November covered call on AES at strike $13.00 using 300 shares is offering an income potential of $90.

The annualized return by writing covered calls in November is 8.95%.

Chart for AES


Telecommunications Focus: Income Opportunities

An August covered call on VOD at strike $31.00 using 300 shares is offering an income potential of $102. In September, a strike 31.00 covered call offers $213 and in October, a strike 31.00 covered call offers $348 in premium.

The annualized return by writing covered calls in August is 33.82%, in September is 21.45% and in October is 18.97%.

Chart for VOD

A September covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $75. In October, a strike 31.00 covered call offers $165 in premium.

The annualized return by writing covered calls in September is 7.60% and in October is 9.00%.

Chart for CTL

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

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