Income Alerts Newsletter for 08/16/2016

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 $118.00 for September 9 2016 are offering a 1.05% return, which annualizes at a rate of 15.29%.

Chart for QQQ

The DIA options at strike $187.00 for September 9 2016 are offering a 0.57% return, which annualizes at a rate of 8.27%.

Chart for DIA

The SPY options at strike $219.50 for September 9 2016 are offering a 0.87% return, which annualizes at a rate of 12.77%.

Chart for SPY


Technology Focus: Income Opportunities

An August covered call on QCOM at strike $62.50 using 300 shares is offering an income potential of $138. In September, a strike 62.50 covered call offers $318 and in October, a strike 62.50 covered call offers $516 in premium.

The annualized return by writing covered calls in August is 54.19%, in September is 19.10% and in October is 15.21%.

Chart for QCOM

An August covered call on BABA at strike $98.00 using 300 shares is offering an income potential of $303. In September, a strike 100.00 covered call offers $516 and in October, a strike 100.00 covered call offers $900 in premium.

The annualized return by writing covered calls in August is 76.67%, in September is 19.93% and in October is 17.10%.

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 $231. In September, a strike 57.50 covered call offers $564 and in October, a strike 57.50 covered call offers $960 in premium.

The annualized return by writing covered calls in August is 100.59%, in September is 37.97% and in October is 32.14%.

Chart for HES

An August covered call on OXY at strike $75.50 using 300 shares is offering an income potential of $90. In September, a strike 77.50 covered call offers $105 and in November, a strike 77.50 covered call offers $483 in premium.

The annualized return by writing covered calls in August is 29.30%, in September is 5.18% and in November is 8.34%.

Chart for OXY


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 $540 and in November, a strike 77.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in August is 37.91%, in September is 26.33% and in November is 17.46%.

Chart for HCA

A September covered call on MCK at strike $200.00 using 300 shares is offering an income potential of $450. In November, a strike 200.00 covered call offers $1,770 in premium.

The annualized return by writing covered calls in September is 8.52% and in November is 11.79%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

An October covered call on KO at strike $45.00 using 300 shares is offering an income potential of $135.

The annualized return by writing covered calls in October is 5.52%.

Chart for KO

An August covered call on WBA at strike $84.00 using 300 shares is offering an income potential of $84. In September, a strike 85.00 covered call offers $282 and in October, a strike 85.00 covered call offers $609 in premium.

The annualized return by writing covered calls in August is 24.53%, in September is 12.58% and in October is 13.36%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

An August covered call on DG at strike $92.50 using 300 shares is offering an income potential of $120. In September, a strike 92.50 covered call offers $705 and in November, a strike 92.50 covered call offers $1,110 in premium.

The annualized return by writing covered calls in August is 31.83%, in September is 28.95% and in November is 15.91%.

Chart for DG

A September covered call on GM at strike $32.00 using 300 shares is offering an income potential of $168. In December, a strike 32.00 covered call offers $399 in premium.

The annualized return by writing covered calls in September is 19.79% and in December is 12.82%.

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 $177. In October, a strike 30.00 covered call offers $324 in premium.

The annualized return by writing covered calls in September is 22.45% and in October is 20.28%.

Chart for MS

A September covered call on WFC at strike $49.00 using 300 shares is offering an income potential of $153. In October, a strike 49.00 covered call offers $339 in premium.

The annualized return by writing covered calls in September is 11.81% and in October is 12.87%.

Chart for WFC


Industrials Focus: Income Opportunities

A September covered call on UTX at strike $110.00 using 300 shares is offering an income potential of $342. In November, a strike 110.00 covered call offers $846 in premium.

The annualized return by writing covered calls in September is 11.62% and in November is 10.03%.

Chart for UTX

A September covered call on HTZ at strike $50.00 using 300 shares is offering an income potential of $480. In October, a strike 50.00 covered call offers $825 in premium.

The annualized return by writing covered calls in September is 37.47% and in October is 32.03%.

Chart for HTZ


Materials Focus: Income Opportunities

An August covered call on LYB at strike $77.50 using 300 shares is offering an income potential of $210. In September, a strike 77.50 covered call offers $600 and in December, a strike 77.50 covered call offers $1,350 in premium.

The annualized return by writing covered calls in August is 66.55%, in September is 29.30% and in December is 18.15%.

Chart for LYB

An August covered call on MON at strike $105.00 using 300 shares is offering an income potential of $336. In September, a strike 105.00 covered call offers $1,305 and in October, a strike 105.00 covered call offers $1,725 in premium.

The annualized return by writing covered calls in August is 78.72%, in September is 47.81% and in October is 31.10%.

Chart for MON


Utilities Focus: Income Opportunities

A November covered call on AES at strike $13.00 using 300 shares is offering an income potential of $75.

The annualized return by writing covered calls in November is 8.03%.

Chart for AES


Telecommunications Focus: Income Opportunities

A September covered call on VOD at strike $32.00 using 300 shares is offering an income potential of $126. In October, a strike 32.00 covered call offers $219 in premium.

The annualized return by writing covered calls in September is 15.02% and in October is 12.80%.

Chart for VOD

An August covered call on TMUS at strike $47.00 using 300 shares is offering an income potential of $111. In September, a strike 47.00 covered call offers $354 and in November, a strike 47.00 covered call offers $702 in premium.

The annualized return by writing covered calls in August is 58.21%, in September is 28.63% and in November is 20.02%.

Chart for TMUS

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

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