Income Alerts Newsletter for 09/06/2016

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 $117.50 for October 7 2016 are offering a 1.20% return, which annualizes at a rate of 13.70%.

Chart for QQQ

The DIA options at strike $185.00 for September 30 2016 are offering a 0.91% return, which annualizes at a rate of 13.31%.

Chart for DIA

The SPY options at strike $218.50 for September 28 2016 are offering a 0.75% return, which annualizes at a rate of 11.93%.

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 $201. In October, a strike 65.00 covered call offers $279 and in November, a strike 65.00 covered call offers $564 in premium.

The annualized return by writing covered calls in September is 32.51%, in October is 11.57% and in November is 14.88%.

Chart for QCOM

A September covered call on AAPL at strike $108.00 using 300 shares is offering an income potential of $432. In October, a strike 110.00 covered call offers $591 and in November, a strike 110.00 covered call offers $960 in premium.

The annualized return by writing covered calls in September is 41.21%, in October is 14.47% and in November is 14.90%.

Chart for AAPL


Energy Focus: Income Opportunities

A September covered call on APC at strike $56.50 using 300 shares is offering an income potential of $456. In October, a strike 57.50 covered call offers $732 and in November, a strike 57.50 covered call offers $1,005 in premium.

The annualized return by writing covered calls in September is 84.11%, in October is 35.06% and in November is 30.68%.

Chart for APC

A September covered call on EOG at strike $89.00 using 300 shares is offering an income potential of $429. In October, a strike 90.00 covered call offers $771 and in January, a strike 90.00 covered call offers $1,575 in premium.

The annualized return by writing covered calls in September is 49.72%, in October is 23.12% and in January is 16.60%.

Chart for EOG


Healthcare Focus: Income Opportunities

A September covered call on HCA at strike $77.00 using 300 shares is offering an income potential of $240. In October, a strike 77.50 covered call offers $495 and in November, a strike 77.50 covered call offers $705 in premium.

The annualized return by writing covered calls in September is 32.14%, in October is 17.12% and in November is 15.42%.

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 $150 and in November, a strike 65.00 covered call offers $279 in premium.

The annualized return by writing covered calls in September is 30.24%, in October is 6.21% and in November is 7.29%.

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 $234. In October, a strike 110.00 covered call offers $324 and in January, a strike 110.00 covered call offers $741 in premium.

The annualized return by writing covered calls in September is 22.15%, in October is 7.85% and in January is 6.20%.

Chart for PEP

A September covered call on WBA at strike $82.50 using 300 shares is offering an income potential of $255. In October, a strike 82.50 covered call offers $642 and in January, a strike 82.50 covered call offers $1,305 in premium.

The annualized return by writing covered calls in September is 31.77%, in October is 20.75% and in January is 14.78%.

Chart for WBA


Consumer Discretionary Focus: Income Opportunities

A September covered call on CBS at strike $52.50 using 300 shares is offering an income potential of $174. In October, a strike 52.50 covered call offers $420 and in December, a strike 52.50 covered call offers $708 in premium.

The annualized return by writing covered calls in September is 34.16%, in October is 21.39% and in December is 16.77%.

Chart for CBS

A September covered call on CMCSA at strike $66.50 using 300 shares is offering an income potential of $150. In October, a strike 67.50 covered call offers $231 and in January, a strike 67.50 covered call offers $639 in premium.

The annualized return by writing covered calls in September is 23.16%, in October is 9.14% and in January is 8.80%.

Chart for CMCSA


Financials Focus: Income Opportunities

A September covered call on MET at strike $43.50 using 300 shares is offering an income potential of $165. In October, a strike 45.00 covered call offers $204 and in November, a strike 45.00 covered call offers $300 in premium.

The annualized return by writing covered calls in September is 39.17%, in October is 12.40% and in November is 11.52%.

Chart for MET

A September covered call on MS at strike $32.00 using 300 shares is offering an income potential of $129. In October, a strike 32.00 covered call offers $327 and in November, a strike 32.00 covered call offers $393 in premium.

The annualized return by writing covered calls in September is 41.57%, in October is 27.48% and in November is 20.85%.

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 $72. In November, a strike 32.00 covered call offers $123 in premium.

The annualized return by writing covered calls in October is 6.00% and in November is 6.46%.

Chart for GE

A September covered call on HTZ at strike $50.00 using 300 shares is offering an income potential of $270. In October, a strike 50.00 covered call offers $705 and in January, a strike 50.00 covered call offers $1,950 in premium.

The annualized return by writing covered calls in September is 56.22%, in October is 38.63% and in January is 39.90%.

Chart for HTZ


Materials Focus: Income Opportunities

A September covered call on CF at strike $26.00 using 300 shares is offering an income potential of $228. In October, a strike 30.00 covered call offers $99 and in November, a strike 30.00 covered call offers $222 in premium.

The annualized return by writing covered calls in September is 91.81%, in October is 10.01% and in November is 14.29%.

Chart for CF

A September covered call on DOW at strike $54.50 using 300 shares is offering an income potential of $144. In October, a strike 55.00 covered call offers $252 and in December, a strike 55.00 covered call offers $582 in premium.

The annualized return by writing covered calls in September is 27.19%, in October is 12.23% and in December is 13.16%.

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 $210 and in December, a strike 52.50 covered call offers $555 in premium.

The annualized return by writing covered calls in September is 46.20%, in October is 11.00% and in December is 13.58%.

Chart for LVLT

A September covered call on SBAC at strike $130.00 using 300 shares is offering an income potential of $105. In October, a strike 120.00 covered call offers $360 and in December, a strike 120.00 covered call offers $795 in premium.

The annualized return by writing covered calls in September is 9.22%, in October is 8.13% and in December is 8.29%.

Chart for SBAC

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

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