Income Alerts Newsletter for 08/18/2016

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 1.08% return, which annualizes at a rate of 17.10%.

Chart for QQQ

The DIA options at strike $186.50 for September 9 2016 are offering a 0.59% return, which annualizes at a rate of 9.35%.

Chart for DIA

The SPY options at strike $218.50 for September 9 2016 are offering a 0.94% return, which annualizes at a rate of 14.89%.

Chart for SPY


Technology Focus: Income Opportunities

A September covered call on QCOM at strike $62.50 using 300 shares is offering an income potential of $273. In October, a strike 62.50 covered call offers $483 in premium.

The annualized return by writing covered calls in September is 17.46% and in October is 14.68%.

Chart for QCOM

An August covered call on AAPL at strike $110.00 using 300 shares is offering an income potential of $72. In September, a strike 110.00 covered call offers $546 and in October, a strike 110.00 covered call offers $915 in premium.

The annualized return by writing covered calls in August is 26.79%, in September is 19.95% and in October is 15.89%.

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 $174. In October, a strike 105.00 covered call offers $474 in premium.

The annualized return by writing covered calls in September is 6.72% and in October is 8.68%.

Chart for CVX

An August covered call on EOG at strike $91.00 using 300 shares is offering an income potential of $87. In September, a strike 92.50 covered call offers $450 and in October, a strike 92.50 covered call offers $873 in premium.

The annualized return by writing covered calls in August is 39.23%, in September is 19.91% and in October is 18.43%.

Chart for EOG


Healthcare Focus: Income Opportunities

A September covered call on ESRX at strike $77.50 using 300 shares is offering an income potential of $345. In October, a strike 77.50 covered call offers $609 in premium.

The annualized return by writing covered calls in September is 17.94% and in October is 15.05%.

Chart for ESRX

An October covered call on JNJ at strike $125.00 using 300 shares is offering an income potential of $270.

The annualized return by writing covered calls in October is 4.13%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

An October covered call on KO at strike $45.00 using 300 shares is offering an income potential of $111.

The annualized return by writing covered calls in October is 4.68%.

Chart for KO

An October covered call on PM at strike $105.00 using 300 shares is offering an income potential of $150.

The annualized return by writing covered calls in October is 2.77%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

An August covered call on AMZN at strike $765.00 using 300 shares is offering an income potential of $900. In September, a strike 765.00 covered call offers $4,470 and in October, a strike 765.00 covered call offers $8,025 in premium.

The annualized return by writing covered calls in August is 47.92%, in September is 23.40% and in October is 20.05%.

Chart for AMZN

A September covered call on CMCSA at strike $70.00 using 300 shares is offering an income potential of $72. In October, a strike 70.00 covered call offers $225 in premium.

The annualized return by writing covered calls in September is 4.18% and in October is 6.19%.

Chart for CMCSA


Financials Focus: Income Opportunities

A September covered call on AXP at strike $67.50 using 300 shares is offering an income potential of $135. In October, a strike 67.50 covered call offers $360 in premium.

The annualized return by writing covered calls in September is 8.12% and in October is 10.29%.

Chart for AXP

An October covered call on BAC at strike $16.00 using 300 shares is offering an income potential of $75.

The annualized return by writing covered calls in October is 9.28%.

Chart for BAC


Industrials Focus: Income Opportunities

An October covered call on GE at strike $32.00 using 300 shares is offering an income potential of $111.

The annualized return by writing covered calls in October is 6.62%.

Chart for GE

An August covered call on UNP at strike $95.00 using 300 shares is offering an income potential of $75. In September, a strike 95.00 covered call offers $405 and in October, a strike 95.00 covered call offers $798 in premium.

The annualized return by writing covered calls in August is 32.25%, in September is 17.05% and in October is 16.01%.

Chart for UNP


Materials Focus: Income Opportunities

An August covered call on NEM at strike $44.50 using 300 shares is offering an income potential of $84. In September, a strike 45.00 covered call offers $402 and in October, a strike 45.00 covered call offers $696 in premium.

The annualized return by writing covered calls in August is 77.92%, in September is 36.98% and in October is 30.78%.

Chart for NEM

A December covered call on DOW at strike $55.00 using 300 shares is offering an income potential of $453.

The annualized return by writing covered calls in December is 8.84%.

Chart for DOW


Utilities Focus: Income Opportunities

A September covered call on D at strike $77.50 using 300 shares is offering an income potential of $165. In October, a strike 77.50 covered call offers $315 in premium.

The annualized return by writing covered calls in September is 8.51% and in October is 7.68%.

Chart for D

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 8.07%.

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 $120. In October, a strike 32.00 covered call offers $213 in premium.

The annualized return by writing covered calls in September is 15.22% and in October is 12.81%.

Chart for VOD

An August covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $90. In September, a strike 115.00 covered call offers $615 and in December, a strike 115.00 covered call offers $1,560 in premium.

The annualized return by writing covered calls in August is 31.97%, in September is 21.47% and in December is 14.24%.

Chart for SBAC

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

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