Income Alerts Newsletter for 09/09/2016

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 1.03% return, which annualizes at a rate of 13.02%.

Chart for QQQ

The DIA options at strike $185.00 for September 30 2016 are offering a 0.76% return, which annualizes at a rate of 12.66%.

Chart for DIA

The SPY options at strike $219.00 for September 28 2016 are offering a 0.56% return, which annualizes at a rate of 10.25%.

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 $120. In October, a strike 65.00 covered call offers $177 and in November, a strike 65.00 covered call offers $450 in premium.

The annualized return by writing covered calls in September is 26.04%, in October is 7.88% and in November is 12.43%.

Chart for QCOM

A September covered call on AAPL at strike $106.00 using 300 shares is offering an income potential of $294. In October, a strike 110.00 covered call offers $333 and in November, a strike 110.00 covered call offers $690 in premium.

The annualized return by writing covered calls in September is 38.02%, in October is 8.82% and in November is 11.30%.

Chart for AAPL


Energy Focus: Income Opportunities

A September covered call on CVX at strike $105.00 using 300 shares is offering an income potential of $135. In October, a strike 105.00 covered call offers $531 and in November, a strike 105.00 covered call offers $771 in premium.

The annualized return by writing covered calls in September is 17.60%, in October is 14.35% and in November is 12.83%.

Chart for CVX

A September covered call on APC at strike $59.50 using 300 shares is offering an income potential of $309. In October, a strike 60.00 covered call offers $696 and in November, a strike 60.00 covered call offers $990 in premium.

The annualized return by writing covered calls in September is 71.98%, in October is 33.92% and in November is 30.00%.

Chart for APC


Healthcare Focus: Income Opportunities

A September covered call on HCA at strike $78.00 using 300 shares is offering an income potential of $270. In October, a strike 80.00 covered call offers $390 and in November, a strike 80.00 covered call offers $720 in premium.

The annualized return by writing covered calls in September is 47.35%, in October is 14.06% and in November is 16.10%.

Chart for HCA

An October covered call on MRK at strike $65.00 using 300 shares is offering an income potential of $138. In November, a strike 65.00 covered call offers $279 in premium.

The annualized return by writing covered calls in October is 6.08% and in November is 7.57%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A September covered call on WBA at strike $85.00 using 300 shares is offering an income potential of $201. In October, a strike 85.00 covered call offers $627 and in January, a strike 85.00 covered call offers $1,290 in premium.

The annualized return by writing covered calls in September is 32.35%, in October is 20.99% and in January is 14.47%.

Chart for WBA

A September covered call on ADM at strike $43.50 using 300 shares is offering an income potential of $105. In October, a strike 44.00 covered call offers $240 and in December, a strike 44.00 covered call offers $468 in premium.

The annualized return by writing covered calls in September is 33.09%, in October is 15.64% and in December is 13.66%.

Chart for ADM


Consumer Discretionary Focus: Income Opportunities

A September covered call on CBS at strike $53.50 using 300 shares is offering an income potential of $195. In October, a strike 55.00 covered call offers $282 and in December, a strike 55.00 covered call offers $549 in premium.

The annualized return by writing covered calls in September is 50.01%, in October is 14.88% and in December is 12.96%.

Chart for CBS

A September covered call on CMCSA at strike $66.50 using 300 shares is offering an income potential of $105. In October, a strike 67.50 covered call offers $219 and in January, a strike 67.50 covered call offers $621 in premium.

The annualized return by writing covered calls in September is 21.57%, in October is 9.26% and in January is 8.73%.

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 $147. In October, a strike 45.00 covered call offers $189 and in November, a strike 45.00 covered call offers $288 in premium.

The annualized return by writing covered calls in September is 46.24%, in October is 12.20% and in November is 11.45%.

Chart for MET

An October covered call on MS at strike $33.00 using 300 shares is offering an income potential of $183. In November, a strike 33.00 covered call offers $249 in premium.

The annualized return by writing covered calls in October is 16.10% and in November is 13.48%.

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 $195. In October, a strike 52.50 covered call offers $585 and in January, a strike 52.50 covered call offers $1,440 in premium.

The annualized return by writing covered calls in September is 51.57%, in October is 32.47% and in January is 27.63%.

Chart for HTZ

A September covered call on UNP at strike $97.00 using 300 shares is offering an income potential of $219. In October, a strike 97.50 covered call offers $681 and in November, a strike 97.50 covered call offers $885 in premium.

The annualized return by writing covered calls in September is 30.87%, in October is 19.96% and in November is 15.96%.

Chart for UNP


Materials Focus: Income Opportunities

A September covered call on NEM at strike $42.00 using 300 shares is offering an income potential of $204. In October, a strike 42.00 covered call offers $603 and in November, a strike 42.00 covered call offers $822 in premium.

The annualized return by writing covered calls in September is 67.41%, in October is 42.13% and in November is 35.75%.

Chart for NEM

A September covered call on CF at strike $26.00 using 300 shares is offering an income potential of $180. In October, a strike 30.00 covered call offers $96 and in November, a strike 30.00 covered call offers $210 in premium.

The annualized return by writing covered calls in September is 95.95%, in October is 10.35% and in November is 14.05%.

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 $315 in premium.

The annualized return by writing covered calls in October is 9.52% and in November is 8.18%.

Chart for AEP

An October covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $135. In November, a strike 24.00 covered call offers $180 in premium.

The annualized return by writing covered calls in October is 16.10% and in November is 13.20%.

Chart for CNP


Telecommunications Focus: Income Opportunities

An October covered call on VZ at strike $55.00 using 300 shares is offering an income potential of $102. In November, a strike 55.00 covered call offers $168 in premium.

The annualized return by writing covered calls in October is 5.30% and in November is 5.35%.

Chart for VZ

An October covered call on LVLT at strike $52.50 using 300 shares is offering an income potential of $180. In December, a strike 52.50 covered call offers $510 in premium.

The annualized return by writing covered calls in October is 10.07% and in December is 12.84%.

Chart for LVLT

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

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