Income Alerts Newsletter for 09/02/2016

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 1.00% return, which annualizes at a rate of 16.65%.

Chart for QQQ

The DIA options at strike $184.50 for September 23 2016 are offering a 0.84% return, which annualizes at a rate of 14.00%.

Chart for DIA

The SPY options at strike $217.50 for September 21 2016 are offering a 0.78% return, which annualizes at a rate of 14.30%.

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 $255. In October, a strike 65.00 covered call offers $312 and in November, a strike 65.00 covered call offers $582 in premium.

The annualized return by writing covered calls in September is 30.97%, in October is 11.92% and in November is 14.57%.

Chart for QCOM

A September covered call on AAPL at strike $107.00 using 300 shares is offering an income potential of $489. In October, a strike 110.00 covered call offers $522 and in November, a strike 110.00 covered call offers $867 in premium.

The annualized return by writing covered calls in September is 35.38%, in October is 11.86% and in November is 12.86%.

Chart for AAPL


Energy Focus: Income Opportunities

A September covered call on EOG at strike $89.00 using 300 shares is offering an income potential of $360. In October, a strike 90.00 covered call offers $801 and in January, a strike 90.00 covered call offers $1,485 in premium.

The annualized return by writing covered calls in September is 31.34%, in October is 22.25% and in January is 15.22%.

Chart for EOG

A September covered call on OXY at strike $77.00 using 300 shares is offering an income potential of $189. In October, a strike 77.50 covered call offers $402 and in November, a strike 77.50 covered call offers $531 in premium.

The annualized return by writing covered calls in September is 18.86%, in October is 12.70% and in November is 10.89%.

Chart for OXY


Healthcare Focus: Income Opportunities

A September covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $195. In October, a strike 65.00 covered call offers $138 and in November, a strike 65.00 covered call offers $282 in premium.

The annualized return by writing covered calls in September is 23.82%, in October is 5.27% and in November is 7.01%.

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 $186. In October, a strike 110.00 covered call offers $261 and in January, a strike 110.00 covered call offers $693 in premium.

The annualized return by writing covered calls in September is 13.26%, in October is 5.85% and in January is 5.66%.

Chart for PEP

A September covered call on WBA at strike $82.00 using 300 shares is offering an income potential of $261. In October, a strike 82.50 covered call offers $540 and in January, a strike 82.50 covered call offers $1,230 in premium.

The annualized return by writing covered calls in September is 24.60%, in October is 16.16% and in January is 13.61%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A September covered call on CMCSA at strike $66.00 using 300 shares is offering an income potential of $219. In October, a strike 67.50 covered call offers $225 and in January, a strike 67.50 covered call offers $639 in premium.

The annualized return by writing covered calls in September is 25.56%, in October is 8.24% and in January is 8.59%.

Chart for CMCSA

A September covered call on GM at strike $32.00 using 300 shares is offering an income potential of $72. In October, a strike 32.00 covered call offers $213 and in December, a strike 32.00 covered call offers $351 in premium.

The annualized return by writing covered calls in September is 17.35%, in October is 16.34% and in December is 13.03%.

Chart for GM


Financials Focus: Income Opportunities

A September covered call on MET at strike $43.50 using 300 shares is offering an income potential of $189. In October, a strike 45.00 covered call offers $213 and in November, a strike 45.00 covered call offers $297 in premium.

The annualized return by writing covered calls in September is 33.87%, in October is 12.00% and in November is 10.87%.

Chart for MET

A September covered call on MS at strike $32.00 using 300 shares is offering an income potential of $165. In October, a strike 32.00 covered call offers $351 and in November, a strike 32.00 covered call offers $417 in premium.

The annualized return by writing covered calls in September is 40.01%, in October is 27.24% and in November is 21.04%.

Chart for MS


Industrials Focus: Income Opportunities

A September covered call on HTZ at strike $50.00 using 300 shares is offering an income potential of $240. In October, a strike 50.00 covered call offers $660 and in January, a strike 50.00 covered call offers $1,950 in premium.

The annualized return by writing covered calls in September is 37.68%, in October is 33.48% and in January is 39.10%.

Chart for HTZ

A September covered call on UNP at strike $95.50 using 300 shares is offering an income potential of $363. In October, a strike 97.50 covered call offers $564 and in November, a strike 97.50 covered call offers $756 in premium.

The annualized return by writing covered calls in September is 29.34%, in October is 14.40% and in November is 12.55%.

Chart for UNP


Materials Focus: Income Opportunities

A September covered call on CF at strike $26.00 using 300 shares is offering an income potential of $210. In October, a strike 30.00 covered call offers $99 and in November, a strike 30.00 covered call offers $207 in premium.

The annualized return by writing covered calls in September is 64.13%, in October is 9.35% and in November is 12.80%.

Chart for CF

A September covered call on DOW at strike $54.00 using 300 shares is offering an income potential of $195. In October, a strike 55.00 covered call offers $216 and in December, a strike 55.00 covered call offers $525 in premium.

The annualized return by writing covered calls in September is 27.90%, in October is 9.71% and in December is 11.47%.

Chart for DOW


Telecommunications Focus: Income Opportunities

A September covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $345. In October, a strike 115.00 covered call offers $855 and in December, a strike 115.00 covered call offers $1,440 in premium.

The annualized return by writing covered calls in September is 23.21%, in October is 18.32% and in December is 14.97%.

Chart for SBAC

A September covered call on TMUS at strike $46.50 using 300 shares is offering an income potential of $222. In October, a strike 47.00 covered call offers $390 and in November, a strike 47.00 covered call offers $570 in premium.

The annualized return by writing covered calls in September is 37.09%, in October is 20.70% and in November is 19.79%.

Chart for TMUS

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

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