Income Alerts Newsletter for 08/23/2016

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 17 2016 are offering a 1.09% return, which annualizes at a rate of 15.36%.

Chart for QQQ

The DIA options at strike $185.50 for September 23 2016 are offering a 1.00% return, which annualizes at a rate of 11.45%.

Chart for DIA

The SPY options at strike $219.00 for September 17 2016 are offering a 0.78% return, which annualizes at a rate of 11.01%.

Chart for SPY


Technology Focus: Income Opportunities

A September covered call on QCOM at strike $63.00 using 300 shares is offering an income potential of $240. In October, a strike 65.00 covered call offers $216 and in November, a strike 65.00 covered call offers $477 in premium.

The annualized return by writing covered calls in September is 18.11%, in October is 6.94% and in November is 10.65%.

Chart for QCOM

A September covered call on AAPL at strike $110.00 using 300 shares is offering an income potential of $399. In October, a strike 110.00 covered call offers $756 and in November, a strike 110.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in September is 17.42%, in October is 14.23% and in November is 14.48%.

Chart for AAPL


Energy Focus: Income Opportunities

A September covered call on EOG at strike $92.50 using 300 shares is offering an income potential of $465. In October, a strike 92.50 covered call offers $900 and in January, a strike 92.50 covered call offers $1,695 in premium.

The annualized return by writing covered calls in September is 24.28%, in October is 20.36% and in January is 15.86%.

Chart for EOG

A September covered call on HAL at strike $45.50 using 300 shares is offering an income potential of $270. In October, a strike 46.00 covered call offers $480 and in November, a strike 46.00 covered call offers $624 in premium.

The annualized return by writing covered calls in September is 28.60%, in October is 22.02% and in November is 19.84%.

Chart for HAL


Healthcare Focus: Income Opportunities

A September covered call on GILD at strike $81.00 using 300 shares is offering an income potential of $459. In October, a strike 82.50 covered call offers $594 and in November, a strike 82.50 covered call offers $930 in premium.

The annualized return by writing covered calls in September is 27.05%, in October is 15.01% and in November is 16.34%.

Chart for GILD

A September covered call on ESRX at strike $77.00 using 300 shares is offering an income potential of $333. In October, a strike 77.50 covered call offers $546 and in November, a strike 77.50 covered call offers $765 in premium.

The annualized return by writing covered calls in September is 20.67%, in October is 14.58% and in November is 14.14%.

Chart for ESRX


Consumer Staples Focus: Income Opportunities

A September covered call on PM at strike $101.00 using 300 shares is offering an income potential of $219. In October, a strike 105.00 covered call offers $108 and in December, a strike 105.00 covered call offers $354 in premium.

The annualized return by writing covered calls in September is 10.31%, in October is 2.16% and in December is 3.72%.

Chart for PM

A September covered call on CVS at strike $98.50 using 300 shares is offering an income potential of $279. In October, a strike 100.00 covered call offers $354 and in November, a strike 100.00 covered call offers $549 in premium.

The annualized return by writing covered calls in September is 13.45%, in October is 7.29% and in November is 7.80%.

Chart for CVS


Consumer Discretionary Focus: Income Opportunities

A September covered call on CBS at strike $53.00 using 300 shares is offering an income potential of $255. In October, a strike 55.00 covered call offers $228 and in December, a strike 55.00 covered call offers $501 in premium.

The annualized return by writing covered calls in September is 23.02%, in October is 8.76% and in December is 10.21%.

Chart for CBS

A September covered call on AMZN at strike $760.00 using 300 shares is offering an income potential of $3,705. In October, a strike 760.00 covered call offers $7,260 and in November, a strike 760.00 covered call offers $12,180 in premium.

The annualized return by writing covered calls in September is 23.21%, in October is 19.69% and in November is 23.16%.

Chart for AMZN


Financials Focus: Income Opportunities

A September covered call on AXP at strike $65.50 using 300 shares is offering an income potential of $291. In October, a strike 67.50 covered call offers $297 and in January, a strike 67.50 covered call offers $699 in premium.

The annualized return by writing covered calls in September is 21.15%, in October is 9.20% and in January is 8.88%.

Chart for AXP

A November covered call on BAC at strike $16.00 using 300 shares is offering an income potential of $99.

The annualized return by writing covered calls in November is 9.11%.

Chart for BAC


Industrials Focus: Income Opportunities

A September covered call on GE at strike $31.50 using 300 shares is offering an income potential of $81. In October, a strike 32.00 covered call offers $90 and in November, a strike 32.00 covered call offers $144 in premium.

The annualized return by writing covered calls in September is 12.21%, in October is 5.79% and in November is 6.38%.

Chart for GE

A September covered call on UNP at strike $95.50 using 300 shares is offering an income potential of $402. In October, a strike 97.50 covered call offers $549 and in November, a strike 97.50 covered call offers $732 in premium.

The annualized return by writing covered calls in September is 20.01%, in October is 11.71% and in November is 10.77%.

Chart for UNP


Materials Focus: Income Opportunities

A September covered call on CF at strike $24.00 using 300 shares is offering an income potential of $249. In November, a strike 25.00 covered call offers $456 and in January, a strike 25.00 covered call offers $612 in premium.

The annualized return by writing covered calls in September is 50.97%, in November is 28.12% and in January is 22.63%.

Chart for CF

An October covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $300. In November, a strike 110.00 covered call offers $480 in premium.

The annualized return by writing covered calls in October is 5.74% and in November is 6.33%.

Chart for PPG


Utilities Focus: Income Opportunities

A September covered call on D at strike $77.50 using 300 shares is offering an income potential of $135. In October, a strike 77.50 covered call offers $300 and in January, a strike 77.50 covered call offers $615 in premium.

The annualized return by writing covered calls in September is 8.33%, in October is 7.95% and in January is 6.63%.

Chart for D

A November covered call on AES at strike $13.00 using 300 shares is offering an income potential of $75. In February, a strike 13.00 covered call offers $135 in premium.

The annualized return by writing covered calls in November is 8.52% and in February is 7.71%.

Chart for AES


Telecommunications Focus: Income Opportunities

A September covered call on VOD at strike $31.50 using 300 shares is offering an income potential of $162. In October, a strike 32.00 covered call offers $180 and in January, a strike 32.00 covered call offers $336 in premium.

The annualized return by writing covered calls in September is 24.64%, in October is 11.69% and in January is 8.91%.

Chart for VOD

A September covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $390. In December, a strike 115.00 covered call offers $1,410 and in January, a strike 115.00 covered call offers $1,800 in premium.

The annualized return by writing covered calls in September is 16.27%, in December is 13.48% and in January is 13.41%.

Chart for SBAC

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

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