Income Alerts Newsletter for 08/31/2016

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 0.99% return, which annualizes at a rate of 15.02%.

Chart for QQQ

The DIA options at strike $184.50 for September 23 2016 are offering a 1.00% return, which annualizes at a rate of 15.17%.

Chart for DIA

The SPY options at strike $218.50 for September 23 2016 are offering a 0.75% return, which annualizes at a rate of 11.39%.

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 $270. In October, a strike 65.00 covered call offers $249 and in November, a strike 65.00 covered call offers $507 in premium.

The annualized return by writing covered calls in September is 29.45%, in October is 9.21% and in November is 12.45%.

Chart for QCOM

A September covered call on AAPL at strike $107.00 using 300 shares is offering an income potential of $378. In October, a strike 110.00 covered call offers $447 and in November, a strike 110.00 covered call offers $759 in premium.

The annualized return by writing covered calls in September is 24.39%, in October is 9.82% and in November is 11.02%.

Chart for AAPL


Energy Focus: Income Opportunities

A September covered call on APC at strike $56.00 using 300 shares is offering an income potential of $447. In October, a strike 57.50 covered call offers $624 and in November, a strike 57.50 covered call offers $897 in premium.

The annualized return by writing covered calls in September is 55.65%, in October is 26.68% and in November is 25.52%.

Chart for APC

A September covered call on EOG at strike $90.50 using 300 shares is offering an income potential of $477. In October, a strike 92.50 covered call offers $690 and in January, a strike 92.50 covered call offers $1,500 in premium.

The annualized return by writing covered calls in September is 36.44%, in October is 18.05% and in January is 14.90%.

Chart for EOG


Healthcare Focus: Income Opportunities

A September covered call on HCA at strike $76.50 using 300 shares is offering an income potential of $300. In October, a strike 77.50 covered call offers $315 and in November, a strike 77.50 covered call offers $585 in premium.

The annualized return by writing covered calls in September is 26.99%, in October is 9.63% and in November is 11.85%.

Chart for HCA

A September covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $186. In October, a strike 65.00 covered call offers $144 and in November, a strike 65.00 covered call offers $270 in premium.

The annualized return by writing covered calls in September is 20.25%, in October is 5.31% and in November is 6.56%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A September covered call on ADM at strike $43.50 using 300 shares is offering an income potential of $168. In October, a strike 44.00 covered call offers $270 and in December, a strike 44.00 covered call offers $495 in premium.

The annualized return by writing covered calls in September is 26.62%, in October is 14.65% and in December is 13.29%.

Chart for ADM

A September covered call on PM at strike $100.00 using 300 shares is offering an income potential of $321. In October, a strike 100.00 covered call offers $561 and in December, a strike 100.00 covered call offers $888 in premium.

The annualized return by writing covered calls in September is 21.94%, in October is 13.13% and in December is 10.22%.

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 $228 and in December, a strike 32.00 covered call offers $354 in premium.

The annualized return by writing covered calls in September is 20.04%, in October is 16.93% and in December is 12.96%.

Chart for GM

A September covered call on AMZN at strike $770.00 using 300 shares is offering an income potential of $2,655. In October, a strike 770.00 covered call offers $6,300 and in November, a strike 770.00 covered call offers $11,280 in premium.

The annualized return by writing covered calls in September is 23.65%, in October is 19.37% and in November is 23.21%.

Chart for AMZN


Financials Focus: Income Opportunities

A September covered call on MET at strike $43.50 using 300 shares is offering an income potential of $207. In October, a strike 45.00 covered call offers $213 and in November, a strike 45.00 covered call offers $312 in premium.

The annualized return by writing covered calls in September is 32.83%, in October is 11.48% and in November is 11.09%.

Chart for MET

A September covered call on MS at strike $32.50 using 300 shares is offering an income potential of $132. In October, a strike 33.00 covered call offers $240 and in November, a strike 33.00 covered call offers $300 in premium.

The annualized return by writing covered calls in September is 28.10%, in October is 17.55% and in November is 14.45%.

Chart for MS


Industrials Focus: Income Opportunities

An October covered call on GE at strike $32.00 using 300 shares is offering an income potential of $84. In November, a strike 32.00 covered call offers $126 in premium.

The annualized return by writing covered calls in October is 6.20% and in November is 6.12%.

Chart for GE

A September covered call on HTZ at strike $50.00 using 300 shares is offering an income potential of $405. In October, a strike 50.00 covered call offers $780 and in January, a strike 50.00 covered call offers $1,950 in premium.

The annualized return by writing covered calls in September is 56.61%, in October is 38.01% and in January is 38.13%.

Chart for HTZ


Materials Focus: Income Opportunities

A September covered call on CF at strike $26.50 using 300 shares is offering an income potential of $243. In October, a strike 30.00 covered call offers $141 and in November, a strike 30.00 covered call offers $264 in premium.

The annualized return by writing covered calls in September is 64.77%, in October is 12.59% and in November is 15.68%.

Chart for CF

A September covered call on DOW at strike $54.00 using 300 shares is offering an income potential of $231. In October, a strike 55.00 covered call offers $243 and in December, a strike 55.00 covered call offers $552 in premium.

The annualized return by writing covered calls in September is 29.34%, in October is 10.49% and in December is 11.81%.

Chart for DOW


Telecommunications Focus: Income Opportunities

A September covered call on LVLT at strike $62.50 using 300 shares is offering an income potential of $225. In October, a strike 52.50 covered call offers $195 and in December, a strike 52.50 covered call offers $555 in premium.

The annualized return by writing covered calls in September is 30.86%, in October is 9.07% and in December is 12.86%.

Chart for LVLT

A September covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $345. 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 20.67%, in December is 14.72% and in January is 14.09%.

Chart for SBAC

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

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