Income Alerts Newsletter for 08/26/2016

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 1.01% return, which annualizes at a rate of 16.08%.

Chart for QQQ

The DIA options at strike $184.50 for September 17 2016 are offering a 0.94% return, which annualizes at a rate of 14.86%.

Chart for DIA

The SPY options at strike $218.00 for September 17 2016 are offering a 0.92% return, which annualizes at a rate of 14.57%.

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 $192. In October, a strike 65.00 covered call offers $192 and in November, a strike 65.00 covered call offers $438 in premium.

The annualized return by writing covered calls in September is 16.38%, in October is 6.50% and in November is 10.13%.

Chart for QCOM

A September covered call on BABA at strike $94.00 using 300 shares is offering an income potential of $672. In October, a strike 95.00 covered call offers $900 and in November, a strike 95.00 covered call offers $1,365 in premium.

The annualized return by writing covered calls in September is 38.77%, in October is 20.76% and in November is 21.60%.

Chart for BABA


Energy Focus: Income Opportunities

A September covered call on HES at strike $57.00 using 300 shares is offering an income potential of $489. In October, a strike 57.50 covered call offers $798 and in November, a strike 57.50 covered call offers $1,005 in premium.

The annualized return by writing covered calls in September is 46.88%, in October is 30.91% and in November is 26.60%.

Chart for HES

A September covered call on OXY at strike $77.50 using 300 shares is offering an income potential of $279. In October, a strike 77.50 covered call offers $543 and in November, a strike 77.50 covered call offers $717 in premium.

The annualized return by writing covered calls in September is 19.31%, in October is 15.08% and in November is 13.53%.

Chart for OXY


Healthcare Focus: Income Opportunities

A September covered call on MRK at strike $62.50 using 300 shares is offering an income potential of $309. In October, a strike 62.50 covered call offers $423 and in November, a strike 62.50 covered call offers $573 in premium.

The annualized return by writing covered calls in September is 26.67%, in October is 14.57% and in November is 13.42%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A September covered call on PEP at strike $108.00 using 300 shares is offering an income potential of $249. In October, a strike 110.00 covered call offers $312 and in January, a strike 110.00 covered call offers $699 in premium.

The annualized return by writing covered calls in September is 12.30%, in October is 6.13% and in January is 5.41%.

Chart for PEP

A September covered call on PM at strike $100.00 using 300 shares is offering an income potential of $336. In October, a strike 100.00 covered call offers $552 and in December, a strike 100.00 covered call offers $843 in premium.

The annualized return by writing covered calls in September is 18.00%, in October is 11.82% and in December is 9.27%.

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 $93. In October, a strike 32.00 covered call offers $222 and in December, a strike 32.00 covered call offers $345 in premium.

The annualized return by writing covered calls in September is 15.75%, in October is 15.12% and in December is 12.12%.

Chart for GM

A September covered call on HD at strike $136.00 using 300 shares is offering an income potential of $354. In October, a strike 140.00 covered call offers $294 and in November, a strike 140.00 covered call offers $597 in premium.

The annualized return by writing covered calls in September is 13.95%, in October is 4.59% and in November is 6.33%.

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 $630. In October, a strike 170.00 covered call offers $1,020 and in January, a strike 170.00 covered call offers $2,025 in premium.

The annualized return by writing covered calls in September is 20.35%, in October is 13.17% and in January is 10.39%.

Chart for GS

A September covered call on JPM at strike $66.50 using 300 shares is offering an income potential of $264. In October, a strike 67.50 covered call offers $339 and in November, a strike 67.50 covered call offers $459 in premium.

The annualized return by writing covered calls in September is 21.42%, in October is 10.95% and in November is 10.06%.

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 $417. In October, a strike 110.00 covered call offers $480 and in November, a strike 110.00 covered call offers $612 in premium.

The annualized return by writing covered calls in September is 20.75%, in October is 9.49% and in November is 8.19%.

Chart for UTX

A September covered call on HTZ at strike $52.50 using 300 shares is offering an income potential of $300. 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 31.96%, in October is 30.62% and in January is 28.63%.

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 $279. In October, a strike 25.00 covered call offers $378 and in November, a strike 25.00 covered call offers $528 in premium.

The annualized return by writing covered calls in September is 63.34%, in October is 34.52% and in November is 33.24%.

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 $465 and in November, a strike 110.00 covered call offers $645 in premium.

The annualized return by writing covered calls in September is 5.22%, in October is 9.27% and in November is 8.72%.

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 $285 and in January, a strike 77.50 covered call offers $525 in premium.

The annualized return by writing covered calls in September is 5.22%, in October is 7.94% and in January is 5.76%.

Chart for D

A February covered call on AES at strike $13.00 using 300 shares is offering an income potential of $135.

The annualized return by writing covered calls in February is 7.96%.

Chart for AES


Telecommunications Focus: Income Opportunities

A September covered call on TMUS at strike $46.50 using 300 shares is offering an income potential of $270. In October, a strike 48.00 covered call offers $306 and in November, a strike 47.00 covered call offers $579 in premium.

The annualized return by writing covered calls in September is 31.47%, in October is 14.18% and in November is 18.47%.

Chart for TMUS

A September covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $405. 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 19.00%, in December is 13.75% and in January is 13.59%.

Chart for SBAC

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

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