Income Alerts Newsletter for 08/12/2016

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 $117.50 for September 2 2016 are offering a 0.97% return, which annualizes at a rate of 16.16%.

Chart for QQQ

The DIA options at strike $186.50 for September 2 2016 are offering a 0.59% return, which annualizes at a rate of 9.85%.

Chart for DIA

The SPY options at strike $219.00 for September 2 2016 are offering a 0.78% return, which annualizes at a rate of 13.00%.

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 $138. In September, a strike 62.50 covered call offers $249 and in October, a strike 62.50 covered call offers $423 in premium.

The annualized return by writing covered calls in August is 30.44%, in September is 13.44% and in October is 11.85%.

Chart for QCOM

An August covered call on BABA at strike $92.00 using 300 shares is offering an income potential of $309. In September, a strike 92.50 covered call offers $825 and in October, a strike 92.50 covered call offers $1,125 in premium.

The annualized return by writing covered calls in August is 46.04%, in September is 30.47% and in October is 21.60%.

Chart for BABA


Energy Focus: Income Opportunities

An August covered call on HES at strike $57.00 using 300 shares is offering an income potential of $282. In September, a strike 57.50 covered call offers $615 and in October, a strike 57.50 covered call offers $990 in premium.

The annualized return by writing covered calls in August is 68.57%, in September is 37.11% and in October is 31.42%.

Chart for HES

An August covered call on EOG at strike $91.00 using 300 shares is offering an income potential of $273. In September, a strike 92.50 covered call offers $570 and in October, a strike 92.50 covered call offers $960 in premium.

The annualized return by writing covered calls in August is 41.30%, in September is 21.21% and in October is 18.63%.

Chart for EOG


Healthcare Focus: Income Opportunities

An August covered call on HCA at strike $77.50 using 300 shares is offering an income potential of $120. In September, a strike 77.50 covered call offers $495 and in November, a strike 77.50 covered call offers $1,110 in premium.

The annualized return by writing covered calls in August is 21.14%, in September is 21.57% and in November is 18.39%.

Chart for HCA

An August covered call on MCK at strike $200.00 using 300 shares is offering an income potential of $105. In September, a strike 200.00 covered call offers $645 and in November, a strike 200.00 covered call offers $1,770 in premium.

The annualized return by writing covered calls in August is 7.23%, in September is 10.91% and in November is 11.29%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

An August covered call on WBA at strike $83.00 using 300 shares is offering an income potential of $180. In September, a strike 85.00 covered call offers $225 and in October, a strike 85.00 covered call offers $522 in premium.

The annualized return by writing covered calls in August is 29.56%, in September is 9.01% and in October is 10.87%.

Chart for WBA

An August covered call on CVS at strike $97.50 using 300 shares is offering an income potential of $126. In September, a strike 100.00 covered call offers $138 and in November, a strike 100.00 covered call offers $531 in premium.

The annualized return by writing covered calls in August is 17.64%, in September is 4.70% and in November is 6.78%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An August covered call on DG at strike $93.00 using 300 shares is offering an income potential of $225. In September, a strike 95.00 covered call offers $495 and in November, a strike 95.00 covered call offers $840 in premium.

The annualized return by writing covered calls in August is 33.07%, in September is 17.87% and in November is 11.37%.

Chart for DG

A September covered call on GM at strike $32.00 using 300 shares is offering an income potential of $177. In December, a strike 32.00 covered call offers $402 in premium.

The annualized return by writing covered calls in September is 18.68% and in December is 12.57%.

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 $84. In September, a strike 30.00 covered call offers $159 and in October, a strike 30.00 covered call offers $300 in premium.

The annualized return by writing covered calls in August is 39.02%, in September is 18.12% and in October is 17.86%.

Chart for MS

An August covered call on WFC at strike $48.50 using 300 shares is offering an income potential of $84. In September, a strike 49.00 covered call offers $177 and in October, a strike 49.00 covered call offers $354 in premium.

The annualized return by writing covered calls in August is 23.68%, in September is 12.21% and in October is 12.71%.

Chart for WFC


Industrials Focus: Income Opportunities

An August covered call on UTX at strike $110.00 using 300 shares is offering an income potential of $75. In September, a strike 110.00 covered call offers $312 and in November, a strike 110.00 covered call offers $801 in premium.

The annualized return by writing covered calls in August is 9.31%, in September is 9.49% and in November is 9.15%.

Chart for UTX

An October covered call on GE at strike $32.00 using 300 shares is offering an income potential of $117.

The annualized return by writing covered calls in October is 6.40%.

Chart for GE


Materials Focus: Income Opportunities

An August covered call on LYB at strike $77.50 using 300 shares is offering an income potential of $75. In September, a strike 77.50 covered call offers $375 and in December, a strike 77.50 covered call offers $1,080 in premium.

The annualized return by writing covered calls in August is 13.27%, in September is 16.36% and in December is 14.06%.

Chart for LYB

An August covered call on MON at strike $106.00 using 300 shares is offering an income potential of $480. In September, a strike 110.00 covered call offers $828 and in October, a strike 110.00 covered call offers $1,200 in premium.

The annualized return by writing covered calls in August is 62.20%, in September is 26.39% and in October is 19.90%.

Chart for MON


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 $465 in premium.

The annualized return by writing covered calls in September is 10.70% and in October is 9.54%.

Chart for DUK

A September covered call on ED at strike $80.00 using 300 shares is offering an income potential of $165. In November, a strike 80.00 covered call offers $495 in premium.

The annualized return by writing covered calls in September is 6.97% and in November is 7.85%.

Chart for ED


Telecommunications Focus: Income Opportunities

A September covered call on VOD at strike $32.00 using 300 shares is offering an income potential of $123. In October, a strike 32.00 covered call offers $210 in premium.

The annualized return by writing covered calls in September is 13.12% and in October is 11.62%.

Chart for VOD

An August covered call on TMUS at strike $47.00 using 300 shares is offering an income potential of $153. In September, a strike 47.00 covered call offers $384 and in November, a strike 47.00 covered call offers $717 in premium.

The annualized return by writing covered calls in August is 44.65%, in September is 27.72% and in November is 19.63%.

Chart for TMUS

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

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