Income Alerts Newsletter for 08/10/2016

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 1.14% return, which annualizes at a rate of 17.37%.

Chart for QQQ

The DIA options at strike $185.50 for September 2 2016 are offering a 0.71% return, which annualizes at a rate of 10.74%.

Chart for DIA

The SPY options at strike $218.50 for September 2 2016 are offering a 0.87% return, which annualizes at a rate of 13.22%.

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 $210. In September, a strike 62.50 covered call offers $276 and in October, a strike 62.50 covered call offers $474 in premium.

The annualized return by writing covered calls in August is 37.90%, in September is 14.10% and in October is 12.90%.

Chart for QCOM

An August covered call on BABA at strike $86.00 using 300 shares is offering an income potential of $522. In September, a strike 87.50 covered call offers $597 and in October, a strike 87.50 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 69.15%, in September is 22.37% and in October is 17.99%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on HES at strike $55.50 using 300 shares is offering an income potential of $357. In September, a strike 57.50 covered call offers $462 and in October, a strike 57.50 covered call offers $837 in premium.

The annualized return by writing covered calls in August is 72.81%, in September is 26.75% and in October is 26.15%.

Chart for HES

An August covered call on EOG at strike $91.00 using 300 shares is offering an income potential of $348. In September, a strike 92.50 covered call offers $600 and in October, a strike 92.50 covered call offers $960 in premium.

The annualized return by writing covered calls in August is 43.14%, in September is 21.18% and in October is 18.10%.

Chart for EOG


Healthcare Focus: Income Opportunities

An August covered call on MCK at strike $200.00 using 300 shares is offering an income potential of $150. In September, a strike 200.00 covered call offers $675 and in November, a strike 200.00 covered call offers $1,830 in premium.

The annualized return by writing covered calls in August is 8.47%, in September is 10.85% and in November is 11.48%.

Chart for MCK

An August covered call on MRK at strike $62.50 using 300 shares is offering an income potential of $201. In September, a strike 62.50 covered call offers $381 and in October, a strike 62.50 covered call offers $513 in premium.

The annualized return by writing covered calls in August is 35.96%, in September is 19.42% and in October is 13.88%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An August covered call on WBA at strike $81.00 using 300 shares is offering an income potential of $207. In September, a strike 82.50 covered call offers $279 and in October, a strike 82.50 covered call offers $609 in premium.

The annualized return by writing covered calls in August is 28.55%, in September is 10.89% and in October is 12.70%.

Chart for WBA

An August covered call on CVS at strike $97.50 using 300 shares is offering an income potential of $228. In September, a strike 100.00 covered call offers $186 and in November, a strike 100.00 covered call offers $594 in premium.

The annualized return by writing covered calls in August is 26.08%, in September is 5.99% and in November is 7.42%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An August covered call on DG at strike $92.50 using 300 shares is offering an income potential of $225. In September, a strike 92.50 covered call offers $750 and in November, a strike 92.50 covered call offers $1,140 in premium.

The annualized return by writing covered calls in August is 27.26%, in September is 26.13% and in November is 15.41%.

Chart for DG

A September covered call on GM at strike $32.00 using 300 shares is offering an income potential of $102. In December, a strike 32.00 covered call offers $321 in premium.

The annualized return by writing covered calls in September is 10.35% and in December is 10.01%.

Chart for GM


Financials Focus: Income Opportunities

An August covered call on MS at strike $29.50 using 300 shares is offering an income potential of $93. In September, a strike 30.00 covered call offers $156 and in October, a strike 30.00 covered call offers $291 in premium.

The annualized return by writing covered calls in August is 35.43%, in September is 16.89% and in October is 16.86%.

Chart for MS

An August covered call on WFC at strike $49.00 using 300 shares is offering an income potential of $114. In September, a strike 49.00 covered call offers $264 and in October, a strike 49.00 covered call offers $453 in premium.

The annualized return by writing covered calls in August is 25.97%, in September is 17.14% and in October is 15.71%.

Chart for WFC


Industrials Focus: Income Opportunities

An August covered call on UTX at strike $109.00 using 300 shares is offering an income potential of $132. In September, a strike 110.00 covered call offers $240 and in November, a strike 110.00 covered call offers $699 in premium.

The annualized return by writing covered calls in August is 13.53%, in September is 6.96% and in November is 7.87%.

Chart for UTX

An October covered call on GE at strike $32.00 using 300 shares is offering an income potential of $129.

The annualized return by writing covered calls in October is 6.87%.

Chart for GE


Materials Focus: Income Opportunities

An August covered call on MON at strike $107.00 using 300 shares is offering an income potential of $534. In September, a strike 110.00 covered call offers $945 and in October, a strike 110.00 covered call offers $1,260 in premium.

The annualized return by writing covered calls in August is 56.40%, in September is 28.53% and in October is 20.25%.

Chart for MON

An August covered call on NEM at strike $45.50 using 300 shares is offering an income potential of $237. In September, a strike 46.00 covered call offers $513 and in October, a strike 46.00 covered call offers $807 in premium.

The annualized return by writing covered calls in August is 59.29%, in September is 36.97% and in October is 31.36%.

Chart for NEM


Utilities Focus: Income Opportunities

An August covered call on DUK at strike $85.00 using 300 shares is offering an income potential of $75. In September, a strike 85.00 covered call offers $270 and in October, a strike 85.00 covered call offers $495 in premium.

The annualized return by writing covered calls in August is 9.82%, in September is 10.05% and in October is 9.80%.

Chart for DUK

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 4.48% and in December is 5.10%.

Chart for NEE


Telecommunications Focus: Income Opportunities

An August covered call on TMUS at strike $48.00 using 300 shares is offering an income potential of $147. In September, a strike 48.00 covered call offers $345 and in November, a strike 48.00 covered call offers $687 in premium.

The annualized return by writing covered calls in August is 34.48%, in September is 23.15% and in November is 18.07%.

Chart for TMUS

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 $150 in premium.

The annualized return by writing covered calls in September is 7.83% and in October is 8.32%.

Chart for CTL

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

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