Income Alerts Newsletter for 09/08/2016

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 0.90% return, which annualizes at a rate of 14.26%.

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 11.04%.

Chart for DIA

The SPY options at strike $219.50 for September 28 2016 are offering a 0.54% return, which annualizes at a rate of 9.42%.

Chart for SPY


Technology Focus: Income Opportunities

A September covered call on QCOM at strike $62.50 using 300 shares is offering an income potential of $180. In October, a strike 62.50 covered call offers $462 and in November, a strike 62.50 covered call offers $759 in premium.

The annualized return by writing covered calls in September is 35.42%, in October is 20.51% and in November is 21.12%.

Chart for QCOM

A September covered call on AAPL at strike $109.00 using 300 shares is offering an income potential of $300. In October, a strike 110.00 covered call offers $525 and in November, a strike 110.00 covered call offers $1,020 in premium.

The annualized return by writing covered calls in September is 34.00%, in October is 13.31% and in November is 16.20%.

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 $255. In October, a strike 105.00 covered call offers $381 and in November, a strike 105.00 covered call offers $582 in premium.

The annualized return by writing covered calls in September is 30.41%, in October is 10.14% and in November is 9.61%.

Chart for CVX

A September covered call on APC at strike $57.50 using 300 shares is offering an income potential of $351. In October, a strike 57.50 covered call offers $789 and in November, a strike 57.50 covered call offers $1,050 in premium.

The annualized return by writing covered calls in September is 76.25%, in October is 39.11% and in November is 32.60%.

Chart for APC


Healthcare Focus: Income Opportunities

A September covered call on HCA at strike $78.50 using 300 shares is offering an income potential of $210. In October, a strike 80.00 covered call offers $420 and in November, a strike 80.00 covered call offers $750 in premium.

The annualized return by writing covered calls in September is 33.00%, in October is 14.80% and in November is 16.53%.

Chart for HCA

A September covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $114. In October, a strike 65.00 covered call offers $135 and in November, a strike 65.00 covered call offers $243 in premium.

The annualized return by writing covered calls in September is 22.20%, in October is 5.85% and in November is 6.53%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A September covered call on WBA at strike $83.00 using 300 shares is offering an income potential of $237. In October, a strike 85.00 covered call offers $363 and in January, a strike 85.00 covered call offers $1,005 in premium.

The annualized return by writing covered calls in September is 35.13%, in October is 12.02% and in January is 11.30%.

Chart for WBA

A September covered call on ADM at strike $44.50 using 300 shares is offering an income potential of $78. In October, a strike 45.00 covered call offers $219 and in December, a strike 45.00 covered call offers $447 in premium.

The annualized return by writing covered calls in September is 21.69%, in October is 13.68% and in December is 12.66%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A September covered call on CBS at strike $53.00 using 300 shares is offering an income potential of $165. In October, a strike 55.00 covered call offers $177 and in December, a strike 55.00 covered call offers $435 in premium.

The annualized return by writing covered calls in September is 38.55%, in October is 9.20% and in December is 10.24%.

Chart for CBS

A September covered call on CMCSA at strike $66.50 using 300 shares is offering an income potential of $138. In October, a strike 67.50 covered call offers $246 and in January, a strike 67.50 covered call offers $651 in premium.

The annualized return by writing covered calls in September is 25.48%, in October is 10.15% and in January is 9.07%.

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 $108. In October, a strike 45.00 covered call offers $162 and in November, a strike 45.00 covered call offers $261 in premium.

The annualized return by writing covered calls in September is 30.75%, in October is 10.29% and in November is 10.30%.

Chart for MET

An October covered call on MS at strike $32.00 using 300 shares is offering an income potential of $276. In November, a strike 32.00 covered call offers $348 in premium.

The annualized return by writing covered calls in October is 24.25% and in November is 19.00%.

Chart for MS


Industrials Focus: Income Opportunities

A September covered call on HTZ at strike $52.50 using 300 shares is offering an income potential of $105. In October, a strike 52.50 covered call offers $450 and in January, a strike 52.50 covered call offers $1,290 in premium.

The annualized return by writing covered calls in September is 25.45%, in October is 24.81% and in January is 24.96%.

Chart for HTZ

A September covered call on UNP at strike $96.50 using 300 shares is offering an income potential of $273. In October, a strike 97.50 covered call offers $651 and in November, a strike 97.50 covered call offers $849 in premium.

The annualized return by writing covered calls in September is 34.83%, in October is 18.70% and in November is 15.14%.

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 $561 and in November, a strike 43.00 covered call offers $720 in premium.

The annualized return by writing covered calls in September is 68.02%, in October is 37.71% and in November is 30.23%.

Chart for NEM

A September covered call on CF at strike $26.00 using 300 shares is offering an income potential of $132. In October, a strike 30.00 covered call offers $81 and in November, a strike 30.00 covered call offers $180 in premium.

The annualized return by writing covered calls in September is 64.01%, in October is 8.67% and in November is 12.03%.

Chart for CF


Utilities Focus: Income Opportunities

An October covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $225. In November, a strike 67.50 covered call offers $330 in premium.

The annualized return by writing covered calls in October is 9.32% and in November is 8.47%.

Chart for AEP

A November covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $120.

The annualized return by writing covered calls in November is 8.74%.

Chart for CNP


Telecommunications Focus: Income Opportunities

A September covered call on VZ at strike $54.00 using 300 shares is offering an income potential of $84. In October, a strike 55.00 covered call offers $117 and in November, a strike 55.00 covered call offers $168 in premium.

The annualized return by writing covered calls in September is 19.13%, in October is 5.93% and in November is 5.27%.

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 $180 and in December, a strike 52.50 covered call offers $495 in premium.

The annualized return by writing covered calls in September is 55.45%, in October is 9.83% and in December is 12.30%.

Chart for LVLT

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

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