Income Alerts Newsletter for 08/19/2016

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 1.02% return, which annualizes at a rate of 16.86%.

Chart for QQQ

The DIA options at strike $186.50 for September 9 2016 are offering a 0.58% return, which annualizes at a rate of 9.58%.

Chart for DIA

The SPY options at strike $219.00 for September 9 2016 are offering a 0.79% return, which annualizes at a rate of 13.14%.

Chart for SPY


Technology Focus: Income Opportunities

A September covered call on QCOM at strike $65.00 using 300 shares is offering an income potential of $78. In October, a strike 65.00 covered call offers $255 in premium.

The annualized return by writing covered calls in September is 5.04% and in October is 7.67%.

Chart for QCOM

A September covered call on AAPL at strike $110.00 using 300 shares is offering an income potential of $501. In October, a strike 110.00 covered call offers $897 in premium.

The annualized return by writing covered calls in September is 18.92% and in October is 15.83%.

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 $282. In October, a strike 105.00 covered call offers $618 in premium.

The annualized return by writing covered calls in September is 11.15% and in October is 11.40%.

Chart for CVX

An August covered call on EOG at strike $92.00 using 300 shares is offering an income potential of $78. In September, a strike 92.50 covered call offers $615 and in October, a strike 92.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in August is 51.87%, in September is 27.81% and in October is 21.61%.

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 $333. In October, a strike 77.50 covered call offers $585 in premium.

The annualized return by writing covered calls in September is 17.89% and in October is 14.66%.

Chart for ESRX

An August covered call on MCK at strike $195.00 using 300 shares is offering an income potential of $105. In September, a strike 195.00 covered call offers $900 and in November, a strike 195.00 covered call offers $2,220 in premium.

The annualized return by writing covered calls in August is 32.91%, in September is 19.07% and in November is 15.53%.

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 $114.

The annualized return by writing covered calls in October is 4.88%.

Chart for KO

An October covered call on PM at strike $105.00 using 300 shares is offering an income potential of $129.

The annualized return by writing covered calls in October is 2.42%.

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 $444. In September, a strike 765.00 covered call offers $4,260 and in October, a strike 765.00 covered call offers $7,860 in premium.

The annualized return by writing covered calls in August is 35.40%, in September is 23.03% and in October is 19.93%.

Chart for AMZN

A September covered call on CMCSA at strike $67.50 using 300 shares is offering an income potential of $309. In October, a strike 67.50 covered call offers $504 in premium.

The annualized return by writing covered calls in September is 18.88% and in October is 14.35%.

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 $123. In October, a strike 67.50 covered call offers $363 in premium.

The annualized return by writing covered calls in September is 7.65% and in October is 10.55%.

Chart for AXP

A September covered call on GS at strike $170.00 using 300 shares is offering an income potential of $420. In October, a strike 170.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in September is 10.34% and in October is 12.44%.

Chart for GS


Industrials Focus: Income Opportunities

An October covered call on GE at strike $32.00 using 300 shares is offering an income potential of $105.

The annualized return by writing covered calls in October is 6.32%.

Chart for GE

An August covered call on UNP at strike $96.00 using 300 shares is offering an income potential of $72. In September, a strike 97.50 covered call offers $252 and in October, a strike 97.50 covered call offers $639 in premium.

The annualized return by writing covered calls in August is 45.82%, in September is 10.76% and in October is 12.76%.

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 $78. In September, a strike 45.00 covered call offers $426 and in October, a strike 45.00 covered call offers $729 in premium.

The annualized return by writing covered calls in August is 107.43%, in September is 40.17% and in October is 32.49%.

Chart for NEM

A September covered call on DOW at strike $55.00 using 300 shares is offering an income potential of $84. In December, a strike 55.00 covered call offers $498 in premium.

The annualized return by writing covered calls in September is 6.43% and in December is 9.71%.

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 $360 in premium.

The annualized return by writing covered calls in September is 8.77% and in October is 8.91%.

Chart for D

A September covered call on NEE at strike $130.00 using 300 shares is offering an income potential of $135. In December, a strike 130.00 covered call offers $720 in premium.

The annualized return by writing covered calls in September is 4.33% and in December is 5.81%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A September covered call on VOD at strike $32.00 using 300 shares is offering an income potential of $147. In October, a strike 32.00 covered call offers $252 in premium.

The annualized return by writing covered calls in September is 19.11% and in October is 15.29%.

Chart for VOD

A September covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $630. In December, a strike 115.00 covered call offers $1,650 in premium.

The annualized return by writing covered calls in September is 22.66% and in December is 15.17%.

Chart for SBAC

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

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.