Income Alerts Newsletter for 08/17/2016

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 9 2016 are offering a 1.07% return, which annualizes at a rate of 16.28%.

Chart for QQQ

The DIA options at strike $186.00 for September 9 2016 are offering a 0.74% return, which annualizes at a rate of 11.22%.

Chart for DIA

The SPY options at strike $218.00 for September 9 2016 are offering a 1.08% return, which annualizes at a rate of 16.36%.

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 $78. In September, a strike 62.50 covered call offers $270 and in October, a strike 62.50 covered call offers $468 in premium.

The annualized return by writing covered calls in August is 38.38%, in September is 16.78% and in October is 14.04%.

Chart for QCOM

An August covered call on AAPL at strike $110.00 using 300 shares is offering an income potential of $147. In September, a strike 110.00 covered call offers $600 and in October, a strike 110.00 covered call offers $990 in premium.

The annualized return by writing covered calls in August is 41.06%, in September is 21.24% and in October is 16.95%.

Chart for AAPL


Energy Focus: Income Opportunities

A September covered call on CVX at strike $105.00 using 300 shares is offering an income potential of $159. In October, a strike 105.00 covered call offers $444 in premium.

The annualized return by writing covered calls in September is 5.92% and in October is 7.97%.

Chart for CVX

An August covered call on EOG at strike $91.00 using 300 shares is offering an income potential of $141. In September, a strike 92.50 covered call offers $492 and in October, a strike 92.50 covered call offers $915 in premium.

The annualized return by writing covered calls in August is 47.76%, in September is 21.11% and in October is 19.05%.

Chart for EOG


Healthcare Focus: Income Opportunities

An August covered call on ESRX at strike $77.00 using 300 shares is offering an income potential of $123. In September, a strike 77.50 covered call offers $423 and in October, a strike 77.50 covered call offers $684 in premium.

The annualized return by writing covered calls in August is 48.87%, in September is 21.28% and in October is 16.63%.

Chart for ESRX

A September covered call on MCK at strike $200.00 using 300 shares is offering an income potential of $420. In November, a strike 200.00 covered call offers $1,620 in premium.

The annualized return by writing covered calls in September is 8.25% and in November is 10.94%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

An August covered call on PM at strike $99.50 using 300 shares is offering an income potential of $123. In September, a strike 100.00 covered call offers $351 and in October, a strike 100.00 covered call offers $579 in premium.

The annualized return by writing covered calls in August is 37.77%, in September is 13.58% and in October is 10.78%.

Chart for PM

A September covered call on CVS at strike $100.00 using 300 shares is offering an income potential of $153. In November, a strike 100.00 covered call offers $585 in premium.

The annualized return by writing covered calls in September is 5.99% and in November is 7.84%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

An August covered call on AMZN at strike $765.00 using 300 shares is offering an income potential of $1,320. In September, a strike 765.00 covered call offers $4,800 and in October, a strike 765.00 covered call offers $8,085 in premium.

The annualized return by writing covered calls in August is 52.85%, in September is 24.40% and in October is 19.92%.

Chart for AMZN

An August covered call on CMCSA at strike $67.50 using 300 shares is offering an income potential of $81. In September, a strike 67.50 covered call offers $318 and in October, a strike 67.50 covered call offers $504 in premium.

The annualized return by writing covered calls in August is 36.75%, in September is 18.25% and in October is 13.95%.

Chart for CMCSA


Financials Focus: Income Opportunities

An August covered call on AXP at strike $65.50 using 300 shares is offering an income potential of $84. In September, a strike 67.50 covered call offers $120 and in October, a strike 67.50 covered call offers $342 in premium.

The annualized return by writing covered calls in August is 39.30%, in September is 7.03% and in October is 9.68%.

Chart for AXP

An October covered call on BAC at strike $16.00 using 300 shares is offering an income potential of $81.

The annualized return by writing covered calls in October is 9.87%.

Chart for BAC


Industrials Focus: Income Opportunities

An August covered call on UNP at strike $93.00 using 300 shares is offering an income potential of $153. In September, a strike 95.00 covered call offers $225 and in October, a strike 95.00 covered call offers $579 in premium.

The annualized return by writing covered calls in August is 50.38%, in September is 9.28% and in October is 11.56%.

Chart for UNP

An August covered call on UPS at strike $110.00 using 300 shares is offering an income potential of $114. In September, a strike 110.00 covered call offers $426 and in October, a strike 110.00 covered call offers $717 in premium.

The annualized return by writing covered calls in August is 31.69%, in September is 14.94% and in October is 12.12%.

Chart for UPS


Materials Focus: Income Opportunities

An August covered call on NEM at strike $44.50 using 300 shares is offering an income potential of $138. In September, a strike 45.00 covered call offers $471 and in October, a strike 45.00 covered call offers $747 in premium.

The annualized return by writing covered calls in August is 95.77%, in September is 41.92% and in October is 32.45%.

Chart for NEM

A September covered call on FCX at strike $13.00 using 300 shares is offering an income potential of $90. In October, a strike 13.00 covered call offers $192 in premium.

The annualized return by writing covered calls in September is 29.05% and in October is 30.48%.

Chart for FCX


Telecommunications Focus: Income Opportunities

A September covered call on VOD at strike $32.00 using 300 shares is offering an income potential of $108. In October, a strike 32.00 covered call offers $201 in premium.

The annualized return by writing covered calls in September is 13.31% and in October is 11.95%.

Chart for VOD

An August covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $135. In September, a strike 115.00 covered call offers $660 and in December, a strike 115.00 covered call offers $1,650 in premium.

The annualized return by writing covered calls in August is 36.05%, in September is 22.38% and in December is 15.00%.

Chart for SBAC

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

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