Income Alerts Newsletter for 08/25/2016

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 $117.00 for September 17 2016 are offering a 1.12% return, which annualizes at a rate of 17.00%.

Chart for QQQ

The DIA options at strike $185.00 for September 17 2016 are offering a 0.89% return, which annualizes at a rate of 13.46%.

Chart for DIA

The SPY options at strike $218.00 for September 17 2016 are offering a 0.95% return, which annualizes at a rate of 14.52%.

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 $195. In October, a strike 65.00 covered call offers $198 and in November, a strike 65.00 covered call offers $432 in premium.

The annualized return by writing covered calls in September is 15.95%, in October is 6.59% and in November is 9.88%.

Chart for QCOM

A September covered call on BABA at strike $94.00 using 300 shares is offering an income potential of $621. In October, a strike 95.00 covered call offers $900 and in November, a strike 95.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in September is 34.29%, in October is 20.42% and in November is 21.12%.

Chart for BABA


Energy Focus: Income Opportunities

A September covered call on CVX at strike $103.00 using 300 shares is offering an income potential of $381. In October, a strike 105.00 covered call offers $444 and in November, a strike 105.00 covered call offers $642 in premium.

The annualized return by writing covered calls in September is 19.14%, in October is 9.09% and in November is 8.97%.

Chart for CVX

A September covered call on HES at strike $56.50 using 300 shares is offering an income potential of $513. In October, a strike 57.50 covered call offers $768 and in November, a strike 57.50 covered call offers $1,005 in premium.

The annualized return by writing covered calls in September is 47.60%, in October is 29.44% and in November is 26.52%.

Chart for HES


Healthcare Focus: Income Opportunities

A September covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $213. In October, a strike 65.00 covered call offers $180 and in November, a strike 65.00 covered call offers $291 in premium.

The annualized return by writing covered calls in September is 17.41%, in October is 5.97% and in November is 6.59%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A September covered call on PEP at strike $109.00 using 300 shares is offering an income potential of $162. In October, a strike 110.00 covered call offers $333 and in January, a strike 110.00 covered call offers $726 in premium.

The annualized return by writing covered calls in September is 7.63%, in October is 6.42% and in January is 5.57%.

Chart for PEP

A September covered call on PM at strike $101.00 using 300 shares is offering an income potential of $210. In October, a strike 105.00 covered call offers $105 and in December, a strike 105.00 covered call offers $339 in premium.

The annualized return by writing covered calls in September is 10.71%, in October is 2.17% and in December is 3.62%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A September covered call on GM at strike $32.00 using 300 shares is offering an income potential of $105. In October, a strike 32.00 covered call offers $240 and in December, a strike 32.00 covered call offers $369 in premium.

The annualized return by writing covered calls in September is 16.94%, in October is 15.98% and in December is 12.78%.

Chart for GM

A September covered call on HD at strike $136.00 using 300 shares is offering an income potential of $315. In October, a strike 140.00 covered call offers $249 and in November, a strike 140.00 covered call offers $546 in premium.

The annualized return by writing covered calls in September is 11.92%, in October is 3.83% and in November is 5.73%.

Chart for HD


Financials Focus: Income Opportunities

A September covered call on GS at strike $167.50 using 300 shares is offering an income potential of $594. In October, a strike 170.00 covered call offers $945 and in January, a strike 170.00 covered call offers $1,875 in premium.

The annualized return by writing covered calls in September is 18.44%, in October is 12.02% and in January is 9.56%.

Chart for GS

A September covered call on JPM at strike $66.00 using 300 shares is offering an income potential of $330. In October, a strike 67.50 covered call offers $321 and in November, a strike 67.50 covered call offers $447 in premium.

The annualized return by writing covered calls in September is 25.80%, in October is 10.20% and in November is 9.70%.

Chart for JPM


Industrials Focus: Income Opportunities

A September covered call on UTX at strike $108.00 using 300 shares is offering an income potential of $432. In October, a strike 110.00 covered call offers $477 and in November, a strike 110.00 covered call offers $642 in premium.

The annualized return by writing covered calls in September is 20.56%, in October is 9.25% and in November is 8.48%.

Chart for UTX

A September covered call on HTZ at strike $52.50 using 300 shares is offering an income potential of $315. In October, a strike 52.50 covered call offers $705 and in January, a strike 52.50 covered call offers $1,590 in premium.

The annualized return by writing covered calls in September is 32.17%, in October is 30.07% and in January is 28.41%.

Chart for HTZ


Materials Focus: Income Opportunities

A September covered call on CF at strike $24.50 using 300 shares is offering an income potential of $240. In October, a strike 25.00 covered call offers $357 and in November, a strike 25.00 covered call offers $507 in premium.

The annualized return by writing covered calls in September is 52.35%, in October is 32.22% and in November is 31.72%.

Chart for CF

A September covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $105. In October, a strike 110.00 covered call offers $420 and in November, a strike 110.00 covered call offers $600 in premium.

The annualized return by writing covered calls in September is 5.02%, in October is 8.25% and in November is 8.04%.

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 $75. In October, a strike 77.50 covered call offers $240 and in January, a strike 77.50 covered call offers $585 in premium.

The annualized return by writing covered calls in September is 5.01%, in October is 6.57% and in January is 6.40%.

Chart for D


Telecommunications Focus: Income Opportunities

A September covered call on TMUS at strike $46.50 using 300 shares is offering an income potential of $303. In October, a strike 48.00 covered call offers $345 and in November, a strike 47.00 covered call offers $633 in premium.

The annualized return by writing covered calls in September is 33.98%, in October is 15.79% and in November is 20.07%.

Chart for TMUS

A September covered call on VOD at strike $31.50 using 300 shares is offering an income potential of $156. In October, a strike 32.00 covered call offers $195 and in January, a strike 32.00 covered call offers $339 in premium.

The annualized return by writing covered calls in September is 25.63%, in October is 13.09% and in January is 9.09%.

Chart for VOD

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

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