Income Alerts Newsletter for 09/07/2016

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 $118.00 for September 30 2016 are offering a 0.96% return, which annualizes at a rate of 14.59%.

Chart for QQQ

The DIA options at strike $185.50 for September 30 2016 are offering a 0.70% return, which annualizes at a rate of 10.58%.

Chart for DIA

The SPY options at strike $219.50 for September 28 2016 are offering a 0.55% return, which annualizes at a rate of 9.06%.

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 $147. In October, a strike 65.00 covered call offers $234 and in November, a strike 65.00 covered call offers $513 in premium.

The annualized return by writing covered calls in September is 25.97%, in October is 9.93% and in November is 13.74%.

Chart for QCOM

A September covered call on AAPL at strike $108.00 using 300 shares is offering an income potential of $405. In October, a strike 110.00 covered call offers $570 and in November, a strike 110.00 covered call offers $945 in premium.

The annualized return by writing covered calls in September is 42.12%, in October is 14.25% and in November is 14.86%.

Chart for AAPL


Energy Focus: Income Opportunities

A September covered call on CVX at strike $103.00 using 300 shares is offering an income potential of $225. In October, a strike 105.00 covered call offers $360 and in November, a strike 105.00 covered call offers $558 in premium.

The annualized return by writing covered calls in September is 24.48%, in October is 9.41% and in November is 9.12%.

Chart for CVX

A September covered call on APC at strike $57.50 using 300 shares is offering an income potential of $369. In October, a strike 57.50 covered call offers $804 and in November, a strike 57.50 covered call offers $1,065 in premium.

The annualized return by writing covered calls in September is 72.93%, in October is 39.01% and in November is 32.64%.

Chart for APC


Healthcare Focus: Income Opportunities

A September covered call on HCA at strike $76.50 using 300 shares is offering an income potential of $330. 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 48.63%, in October is 17.57% and in November is 15.71%.

Chart for HCA

A September covered call on MRK at strike $63.50 using 300 shares is offering an income potential of $120. In October, a strike 65.00 covered call offers $159 and in November, a strike 65.00 covered call offers $282 in premium.

The annualized return by writing covered calls in September is 21.12%, in October is 6.71% and in November is 7.44%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An October covered call on KO at strike $44.00 using 300 shares is offering an income potential of $138. In November, a strike 44.00 covered call offers $225 in premium.

The annualized return by writing covered calls in October is 8.42% and in November is 8.60%.

Chart for KO

A September covered call on PEP at strike $108.00 using 300 shares is offering an income potential of $216. In October, a strike 110.00 covered call offers $300 and in January, a strike 110.00 covered call offers $726 in premium.

The annualized return by writing covered calls in September is 22.29%, in October is 7.42% and in January is 6.11%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

A September covered call on CMCSA at strike $66.50 using 300 shares is offering an income potential of $162. In October, a strike 67.50 covered call offers $252 and in January, a strike 67.50 covered call offers $636 in premium.

The annualized return by writing covered calls in September is 27.23%, in October is 10.18% and in January is 8.80%.

Chart for CMCSA

An October covered call on GM at strike $33.00 using 300 shares is offering an income potential of $138. In December, a strike 33.00 covered call offers $249 in premium.

The annualized return by writing covered calls in October is 11.53% and in December is 9.49%.

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 $129. In October, a strike 45.00 covered call offers $171 and in November, a strike 45.00 covered call offers $267 in premium.

The annualized return by writing covered calls in September is 33.44%, in October is 10.63% and in November is 10.40%.

Chart for MET

A September covered call on MS at strike $32.00 using 300 shares is offering an income potential of $90. In October, a strike 32.00 covered call offers $297 and in November, a strike 32.00 covered call offers $363 in premium.

The annualized return by writing covered calls in September is 31.65%, in October is 25.54% and in November is 19.54%.

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 $255. In October, a strike 50.00 covered call offers $645 and in January, a strike 50.00 covered call offers $1,950 in premium.

The annualized return by writing covered calls in September is 57.91%, in October is 35.99% and in January is 40.23%.

Chart for HTZ

A September covered call on UNP at strike $96.00 using 300 shares is offering an income potential of $291. In October, a strike 97.50 covered call offers $588 and in November, a strike 97.50 covered call offers $795 in premium.

The annualized return by writing covered calls in September is 33.88%, in October is 16.54% and in November is 14.01%.

Chart for UNP


Materials Focus: Income Opportunities

A September covered call on NEM at strike $42.50 using 300 shares is offering an income potential of $231. In October, a strike 43.00 covered call offers $567 and in November, a strike 43.00 covered call offers $774 in premium.

The annualized return by writing covered calls in September is 61.97%, in October is 37.39% and in November is 32.28%.

Chart for NEM

A September covered call on CF at strike $26.00 using 300 shares is offering an income potential of $168. In October, a strike 30.00 covered call offers $72 and in November, a strike 30.00 covered call offers $192 in premium.

The annualized return by writing covered calls in September is 74.06%, in October is 7.49% and in November is 12.62%.

Chart for CF


Utilities Focus: Income Opportunities

An October covered call on CNP at strike $23.00 using 300 shares is offering an income potential of $120. In November, a strike 23.00 covered call offers $180 in premium.

The annualized return by writing covered calls in October is 14.17% and in November is 13.33%.

Chart for CNP

An October covered call on NEE at strike $130.00 using 300 shares is offering an income potential of $225. In December, a strike 130.00 covered call offers $540 in premium.

The annualized return by writing covered calls in October is 4.78% and in December is 5.22%.

Chart for NEE


Telecommunications Focus: Income Opportunities

A September covered call on VZ at strike $54.00 using 300 shares is offering an income potential of $78. In October, a strike 55.00 covered call offers $108 and in November, a strike 55.00 covered call offers $174 in premium.

The annualized return by writing covered calls in September is 16.20%, in October is 5.37% and in November is 5.40%.

Chart for VZ

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 $540 in premium.

The annualized return by writing covered calls in September is 50.37%, in October is 10.42% and in December is 13.32%.

Chart for LVLT

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

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