Income Alerts Newsletter for 08/24/2016

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 17 2016 are offering a 0.90% return, which annualizes at a rate of 13.16%.

Chart for QQQ

The DIA options at strike $185.50 for September 17 2016 are offering a 0.88% return, which annualizes at a rate of 12.88%.

Chart for DIA

The SPY options at strike $219.00 for September 17 2016 are offering a 0.88% return, which annualizes at a rate of 12.85%.

Chart for SPY


Technology Focus: Income Opportunities

A September covered call on QCOM at strike $63.50 using 300 shares is offering an income potential of $192. In October, a strike 65.00 covered call offers $234 and in November, a strike 65.00 covered call offers $489 in premium.

The annualized return by writing covered calls in September is 14.96%, in October is 7.62% and in November is 11.00%.

Chart for QCOM

A September covered call on BABA at strike $96.00 using 300 shares is offering an income potential of $630. In October, a strike 97.50 covered call offers $900 and in November, a strike 97.50 covered call offers $1,335 in premium.

The annualized return by writing covered calls in September is 32.72%, in October is 19.67% and in November is 20.21%.

Chart for BABA


Energy Focus: Income Opportunities

A September covered call on HES at strike $56.50 using 300 shares is offering an income potential of $507. In October, a strike 57.50 covered call offers $789 and in November, a strike 57.50 covered call offers $1,005 in premium.

The annualized return by writing covered calls in September is 45.08%, in October is 29.74% and in November is 26.18%.

Chart for HES

A September covered call on OXY at strike $77.00 using 300 shares is offering an income potential of $279. In October, a strike 77.50 covered call offers $429 and in November, a strike 77.50 covered call offers $624 in premium.

The annualized return by writing covered calls in September is 17.88%, in October is 11.53% and in November is 11.53%.

Chart for OXY


Healthcare Focus: Income Opportunities

A September covered call on GILD at strike $81.50 using 300 shares is offering an income potential of $429. In October, a strike 82.50 covered call offers $636 and in November, a strike 82.50 covered call offers $990 in premium.

The annualized return by writing covered calls in September is 26.08%, in October is 16.25% and in November is 17.51%.

Chart for GILD

A September covered call on MCK at strike $195.00 using 300 shares is offering an income potential of $540. In October, a strike 195.00 covered call offers $1,290 and in November, a strike 195.00 covered call offers $1,800 in premium.

The annualized return by writing covered calls in September is 13.76%, in October is 13.88% and in November is 13.33%.

Chart for MCK


Consumer Staples Focus: Income Opportunities

A September covered call on PEP at strike $108.00 using 300 shares is offering an income potential of $243. In October, a strike 110.00 covered call offers $300 and in January, a strike 110.00 covered call offers $684 in premium.

The annualized return by writing covered calls in September is 11.05%, in October is 5.69% and in January is 5.22%.

Chart for PEP

A September covered call on PM at strike $101.00 using 300 shares is offering an income potential of $249. In October, a strike 105.00 covered call offers $117 and in December, a strike 105.00 covered call offers $345 in premium.

The annualized return by writing covered calls in September is 12.17%, in October is 2.37% and in December is 3.65%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A September covered call on CBS at strike $53.00 using 300 shares is offering an income potential of $267. In October, a strike 55.00 covered call offers $228 and in December, a strike 55.00 covered call offers $486 in premium.

The annualized return by writing covered calls in September is 25.03%, in October is 8.88% and in December is 9.96%.

Chart for CBS

A September covered call on GM at strike $32.00 using 300 shares is offering an income potential of $123. In October, a strike 32.00 covered call offers $258 and in December, a strike 32.00 covered call offers $390 in premium.

The annualized return by writing covered calls in September is 19.01%, in October is 16.85% and in December is 13.37%.

Chart for GM


Financials Focus: Income Opportunities

A September covered call on GS at strike $167.50 using 300 shares is offering an income potential of $627. In October, a strike 170.00 covered call offers $975 and in January, a strike 170.00 covered call offers $1,965 in premium.

The annualized return by writing covered calls in September is 18.61%, in October is 12.14% and in January is 9.92%.

Chart for GS

A September covered call on JPM at strike $66.00 using 300 shares is offering an income potential of $273. In October, a strike 67.50 covered call offers $276 and in November, a strike 67.50 covered call offers $399 in premium.

The annualized return by writing covered calls in September is 20.48%, in October is 8.63% and in November is 8.56%.

Chart for JPM


Industrials Focus: Income Opportunities

A September covered call on UTX at strike $109.00 using 300 shares is offering an income potential of $306. In October, a strike 110.00 covered call offers $492 and in November, a strike 110.00 covered call offers $633 in premium.

The annualized return by writing covered calls in September is 13.92%, in October is 9.38% and in November is 8.26%.

Chart for UTX

A September covered call on HTZ at strike $52.50 using 300 shares is offering an income potential of $420. In October, a strike 52.50 covered call offers $825 and in January, a strike 52.50 covered call offers $1,590 in premium.

The annualized return by writing covered calls in September is 41.00%, in October is 34.49% and in January is 27.88%.

Chart for HTZ


Materials Focus: Income Opportunities

A September covered call on CF at strike $25.00 using 300 shares is offering an income potential of $282. In October, a strike 25.00 covered call offers $459 and in November, a strike 25.00 covered call offers $624 in premium.

The annualized return by writing covered calls in September is 57.45%, in October is 39.95% and in November is 37.92%.

Chart for CF

A September covered call on NEM at strike $43.50 using 300 shares is offering an income potential of $393. In October, a strike 44.00 covered call offers $612 and in November, a strike 44.00 covered call offers $846 in premium.

The annualized return by writing covered calls in September is 45.71%, in October is 30.19% and in November is 29.00%.

Chart for NEM


Utilities Focus: Income Opportunities

A September covered call on D at strike $77.50 using 300 shares is offering an income potential of $75. In October, a strike 77.50 covered call offers $240 and in January, a strike 77.50 covered call offers $510 in premium.

The annualized return by writing covered calls in September is 4.83%, in October is 6.49% and in January is 5.54%.

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 8.69% and in February is 7.82%.

Chart for AES


Telecommunications Focus: Income Opportunities

A September covered call on TMUS at strike $47.00 using 300 shares is offering an income potential of $294. In October, a strike 48.00 covered call offers $375 and in November, a strike 47.00 covered call offers $675 in premium.

The annualized return by writing covered calls in September is 31.21%, in October is 16.68% and in November is 20.93%.

Chart for TMUS

A September covered call on VOD at strike $31.50 using 300 shares is offering an income potential of $168. In October, a strike 32.00 covered call offers $198 and in January, a strike 32.00 covered call offers $327 in premium.

The annualized return by writing covered calls in September is 26.52%, in October is 13.07% and in January is 8.70%.

Chart for VOD

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

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