Income Alerts Newsletter for 08/11/2016

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 1.02% return, which annualizes at a rate of 16.22%.

Chart for QQQ

The DIA options at strike $185.50 for September 2 2016 are offering a 0.66% return, which annualizes at a rate of 10.44%.

Chart for DIA

The SPY options at strike $218.00 for September 2 2016 are offering a 0.89% return, which annualizes at a rate of 14.20%.

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 $420 in premium.

The annualized return by writing covered calls in August is 31.62%, in September is 12.62% and in October is 11.61%.

Chart for QCOM

An August covered call on BABA at strike $87.50 using 300 shares is offering an income potential of $600. In September, a strike 87.50 covered call offers $891 and in October, a strike 87.50 covered call offers $1,170 in premium.

The annualized return by writing covered calls in August is 85.55%, in September is 33.82% and in October is 23.37%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on HES at strike $55.00 using 300 shares is offering an income potential of $297. In September, a strike 55.00 covered call offers $765 and in October, a strike 55.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in August is 67.25%, in September is 46.95% and in October is 32.61%.

Chart for HES

An August covered call on EOG at strike $90.00 using 300 shares is offering an income potential of $324. In September, a strike 90.00 covered call offers $798 and in October, a strike 90.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in August is 44.62%, in September is 29.45% and in October is 22.50%.

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 $90. In September, a strike 200.00 covered call offers $555 and in November, a strike 200.00 covered call offers $1,740 in premium.

The annualized return by writing covered calls in August is 5.61%, in September is 9.17% and in November is 11.04%.

Chart for MCK

An August covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $135. In September, a strike 65.00 covered call offers $93 and in October, a strike 65.00 covered call offers $195 in premium.

The annualized return by writing covered calls in August is 26.41%, in September is 4.78% and in October is 5.24%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An August covered call on WBA at strike $83.00 using 300 shares is offering an income potential of $177. In September, a strike 85.00 covered call offers $207 and in October, a strike 85.00 covered call offers $492 in premium.

The annualized return by writing covered calls in August is 26.29%, in September is 8.10% and in October is 10.14%.

Chart for WBA

An August covered call on CVS at strike $97.50 using 300 shares is offering an income potential of $159. In September, a strike 100.00 covered call offers $150 and in November, a strike 100.00 covered call offers $549 in premium.

The annualized return by writing covered calls in August is 20.03%, in September is 4.97% and in November is 6.94%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An August covered call on DG at strike $93.50 using 300 shares is offering an income potential of $195. In September, a strike 95.00 covered call offers $525 and in November, a strike 95.00 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 25.68%, in September is 18.42% and in November is 12.04%.

Chart for DG

An August covered call on GM at strike $31.50 using 300 shares is offering an income potential of $72. In September, a strike 32.00 covered call offers $111 and in December, a strike 32.00 covered call offers $333 in premium.

The annualized return by writing covered calls in August is 28.25%, in September is 11.51% and in December is 10.42%.

Chart for GM


Financials Focus: Income Opportunities

A September covered call on MS at strike $30.00 using 300 shares is offering an income potential of $129. In October, a strike 30.00 covered call offers $264 in premium.

The annualized return by writing covered calls in September is 14.40% and in October is 15.59%.

Chart for MS

An August covered call on WFC at strike $48.50 using 300 shares is offering an income potential of $87. In September, a strike 49.00 covered call offers $174 and in October, a strike 49.00 covered call offers $348 in premium.

The annualized return by writing covered calls in August is 22.10%, in September is 11.70% and in October is 12.34%.

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 $90. In September, a strike 110.00 covered call offers $210 and in November, a strike 110.00 covered call offers $666 in premium.

The annualized return by writing covered calls in August is 10.16%, in September is 6.26% and in November is 7.58%.

Chart for UTX

An October covered call on GE at strike $32.00 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in October is 6.48%.

Chart for GE


Materials Focus: Income Opportunities

An August covered call on MON at strike $106.00 using 300 shares is offering an income potential of $531. In September, a strike 110.00 covered call offers $807 and in October, a strike 110.00 covered call offers $1,185 in premium.

The annualized return by writing covered calls in August is 62.02%, in September is 25.02% and in October is 19.36%.

Chart for MON

An August covered call on NEM at strike $46.00 using 300 shares is offering an income potential of $225. In September, a strike 46.00 covered call offers $579 and in October, a strike 46.00 covered call offers $876 in premium.

The annualized return by writing covered calls in August is 61.08%, in September is 42.48% and in October is 34.23%.

Chart for NEM


Utilities Focus: Income Opportunities

A September covered call on DUK at strike $85.00 using 300 shares is offering an income potential of $270. In October, a strike 85.00 covered call offers $480 in premium.

The annualized return by writing covered calls in September is 10.43% and in October is 9.73%.

Chart for DUK

A September covered call on NEE at strike $130.00 using 300 shares is offering an income potential of $165. In December, a strike 130.00 covered call offers $675 in premium.

The annualized return by writing covered calls in September is 4.20% and in December is 5.13%.

Chart for NEE


Telecommunications Focus: Income Opportunities

An August covered call on TMUS at strike $47.50 using 300 shares is offering an income potential of $138. In September, a strike 48.00 covered call offers $285 and in November, a strike 48.00 covered call offers $630 in premium.

The annualized return by writing covered calls in August is 35.92%, in September is 19.73% and in November is 16.83%.

Chart for TMUS

A September covered call on CTL at strike $31.00 using 300 shares is offering an income potential of $90. In October, a strike 31.00 covered call offers $165 in premium.

The annualized return by writing covered calls in September is 9.59% and in October is 9.23%.

Chart for CTL

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

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