Income Alerts Newsletter for 08/30/2016

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 23 2016 are offering a 1.20% return, which annualizes at a rate of 17.56%.

Chart for QQQ

The DIA options at strike $185.00 for September 23 2016 are offering a 0.93% return, which annualizes at a rate of 13.63%.

Chart for DIA

The SPY options at strike $218.50 for September 23 2016 are offering a 0.90% return, which annualizes at a rate of 13.16%.

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 $285. In October, a strike 65.00 covered call offers $255 and in November, a strike 65.00 covered call offers $528 in premium.

The annualized return by writing covered calls in September is 29.42%, in October is 9.25% and in November is 12.80%.

Chart for QCOM

A September covered call on BABA at strike $95.00 using 300 shares is offering an income potential of $531. In October, a strike 95.00 covered call offers $1,020 and in November, a strike 95.00 covered call offers $1,455 in premium.

The annualized return by writing covered calls in September is 36.52%, in October is 25.12% and in November is 23.98%.

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 $453. In October, a strike 57.50 covered call offers $750 and in November, a strike 57.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in September is 52.83%, in October is 31.34% and in November is 28.54%.

Chart for HES

A September covered call on OXY at strike $78.00 using 300 shares is offering an income potential of $231. In October, a strike 80.00 covered call offers $249 and in November, a strike 80.00 covered call offers $444 in premium.

The annualized return by writing covered calls in September is 19.17%, in October is 7.27% and in November is 8.61%.

Chart for OXY


Healthcare Focus: Income Opportunities

A September covered call on MRK at strike $63.50 using 300 shares is offering an income potential of $189. In October, a strike 65.00 covered call offers $186 and in November, a strike 65.00 covered call offers $297 in premium.

The annualized return by writing covered calls in September is 19.40%, in October is 6.72% and in November is 7.11%.

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 $210. In October, a strike 110.00 covered call offers $291 and in January, a strike 110.00 covered call offers $684 in premium.

The annualized return by writing covered calls in September is 12.53%, in October is 6.13% and in January is 5.43%.

Chart for PEP

A September covered call on PM at strike $101.00 using 300 shares is offering an income potential of $216. In October, a strike 105.00 covered call offers $93 and in December, a strike 105.00 covered call offers $327 in premium.

The annualized return by writing covered calls in September is 13.90%, in October is 2.10% and in December is 3.65%.

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 $108. In October, a strike 32.00 covered call offers $243 and in December, a strike 32.00 covered call offers $369 in premium.

The annualized return by writing covered calls in September is 21.99%, in October is 17.66% and in December is 13.35%.

Chart for GM

A September covered call on HD at strike $136.00 using 300 shares is offering an income potential of $219. In October, a strike 140.00 covered call offers $213 and in November, a strike 140.00 covered call offers $504 in premium.

The annualized return by writing covered calls in September is 10.43%, in October is 3.57% and in November is 5.60%.

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 $561. In October, a strike 170.00 covered call offers $975 and in January, a strike 170.00 covered call offers $2,010 in premium.

The annualized return by writing covered calls in September is 21.77%, in October is 13.43% and in January is 10.53%.

Chart for GS

A September covered call on JPM at strike $67.00 using 300 shares is offering an income potential of $252. In October, a strike 67.50 covered call offers $405 and in November, a strike 67.50 covered call offers $525 in premium.

The annualized return by writing covered calls in September is 24.41%, in October is 13.91% and in November is 11.95%.

Chart for JPM


Industrials Focus: Income Opportunities

A September covered call on GE at strike $31.50 using 300 shares is offering an income potential of $72. In October, a strike 32.00 covered call offers $90 and in November, a strike 32.00 covered call offers $132 in premium.

The annualized return by writing covered calls in September is 14.82%, in October is 6.53% and in November is 6.33%.

Chart for GE

A September covered call on UTX at strike $108.00 using 300 shares is offering an income potential of $351. In October, a strike 110.00 covered call offers $399 and in November, a strike 110.00 covered call offers $597 in premium.

The annualized return by writing covered calls in September is 21.05%, in October is 8.43% and in November is 8.36%.

Chart for UTX


Materials Focus: Income Opportunities

A September covered call on CF at strike $25.00 using 300 shares is offering an income potential of $261. In October, a strike 25.00 covered call offers $462 and in November, a strike 25.00 covered call offers $618 in premium.

The annualized return by writing covered calls in September is 69.32%, in October is 44.41% and in November is 40.01%.

Chart for CF

A September covered call on PPG at strike $110.00 using 300 shares is offering an income potential of $135. In October, a strike 110.00 covered call offers $555 and in November, a strike 110.00 covered call offers $750 in premium.

The annualized return by writing covered calls in September is 8.07%, in October is 11.82% and in November is 10.59%.

Chart for PPG


Utilities Focus: Income Opportunities

A February covered call on AES at strike $13.00 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in February is 7.18%.

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 $225. In October, a strike 47.00 covered call offers $441 and in November, a strike 47.00 covered call offers $633 in premium.

The annualized return by writing covered calls in September is 31.34%, in October is 21.95% and in November is 21.05%.

Chart for TMUS

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 $1,440 and in January, a strike 115.00 covered call offers $1,800 in premium.

The annualized return by writing covered calls in September is 22.11%, in December is 14.55% and in January is 13.95%.

Chart for SBAC

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

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