Income Alerts Newsletter for 09/13/2016

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 $116.50 for October 7 2016 are offering a 1.26% return, which annualizes at a rate of 18.43%.

Chart for QQQ

The SPY options at strike $216.50 for October 5 2016 are offering a 0.97% return, which annualizes at a rate of 15.41%.

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 $102. In October, a strike 62.50 covered call offers $417 and in November, a strike 62.50 covered call offers $744 in premium.

The annualized return by writing covered calls in September is 40.09%, in October is 20.84% and in November is 22.27%.

Chart for QCOM

A September covered call on AAPL at strike $106.00 using 300 shares is offering an income potential of $201. In October, a strike 110.00 covered call offers $324 and in November, a strike 110.00 covered call offers $714 in premium.

The annualized return by writing covered calls in September is 46.68%, in October is 9.44% and in November is 12.40%.

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 $120. In October, a strike 105.00 covered call offers $318 and in November, a strike 105.00 covered call offers $510 in premium.

The annualized return by writing covered calls in September is 28.67%, in October is 9.56% and in November is 9.08%.

Chart for CVX

A September covered call on APC at strike $58.00 using 300 shares is offering an income potential of $237. In October, a strike 60.00 covered call offers $483 and in November, a strike 60.00 covered call offers $762 in premium.

The annualized return by writing covered calls in September is 101.18%, in October is 26.15% and in November is 24.68%.

Chart for APC


Healthcare Focus: Income Opportunities

A September covered call on HCA at strike $77.50 using 300 shares is offering an income potential of $105. In October, a strike 77.50 covered call offers $585 and in November, a strike 77.50 covered call offers $930 in premium.

The annualized return by writing covered calls in September is 33.31%, in October is 23.69% and in November is 22.50%.

Chart for HCA

An October covered call on MRK at strike $65.00 using 300 shares is offering an income potential of $165. In November, a strike 65.00 covered call offers $288 in premium.

The annualized return by writing covered calls in October is 8.01% and in November is 8.28%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

A September covered call on WBA at strike $84.00 using 300 shares is offering an income potential of $150. In October, a strike 85.00 covered call offers $465 and in January, a strike 85.00 covered call offers $1,125 in premium.

The annualized return by writing covered calls in September is 43.94%, in October is 17.24% and in January is 13.09%.

Chart for WBA

A September covered call on PM at strike $101.00 using 300 shares is offering an income potential of $150. In December, a strike 105.00 covered call offers $348 in premium.

The annualized return by writing covered calls in September is 36.45% and in December is 4.43%.

Chart for PM


Consumer Discretionary Focus: Income Opportunities

A September covered call on CBS at strike $53.00 using 300 shares is offering an income potential of $150. In October, a strike 55.00 covered call offers $177 and in December, a strike 55.00 covered call offers $453 in premium.

The annualized return by writing covered calls in September is 69.84%, in October is 10.32% and in December is 11.20%.

Chart for CBS

A September covered call on AMZN at strike $772.50 using 300 shares is offering an income potential of $1,530. In October, a strike 775.00 covered call offers $5,385 and in November, a strike 775.00 covered call offers $10,680 in premium.

The annualized return by writing covered calls in September is 48.58%, in October is 21.74% and in November is 25.97%.

Chart for AMZN


Financials Focus: Income Opportunities

A September covered call on MET at strike $44.50 using 300 shares is offering an income potential of $108. In October, a strike 45.00 covered call offers $318 and in November, a strike 45.00 covered call offers $441 in premium.

The annualized return by writing covered calls in September is 59.82%, in October is 22.37% and in November is 18.43%.

Chart for MET

An October covered call on MS at strike $33.00 using 300 shares is offering an income potential of $225. In November, a strike 33.00 covered call offers $300 in premium.

The annualized return by writing covered calls in October is 21.73% and in November is 17.18%.

Chart for MS


Industrials Focus: Income Opportunities

An October covered call on HTZ at strike $52.50 using 300 shares is offering an income potential of $360. In January, a strike 52.50 covered call offers $1,110 in premium.

The annualized return by writing covered calls in October is 22.30% and in January is 22.12%.

Chart for HTZ

A September covered call on UNP at strike $94.00 using 300 shares is offering an income potential of $225. In October, a strike 95.00 covered call offers $669 and in November, a strike 95.00 covered call offers $876 in premium.

The annualized return by writing covered calls in September is 58.83%, in October is 22.22% and in November is 17.24%.

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 $96. In November, a strike 30.00 covered call offers $165 in premium.

The annualized return by writing covered calls in September is 92.74% and in November is 11.83%.

Chart for CF

An October covered call on FCX at strike $12.00 using 300 shares is offering an income potential of $114. In November, a strike 12.00 covered call offers $195 in premium.

The annualized return by writing covered calls in October is 32.41% and in November is 33.45%.

Chart for FCX


Utilities Focus: Income Opportunities

An October covered call on CNP at strike $23.00 using 300 shares is offering an income potential of $150. In November, a strike 23.00 covered call offers $210 in premium.

The annualized return by writing covered calls in October is 20.32% and in November is 16.89%.

Chart for CNP

A November covered call on AES at strike $13.00 using 300 shares is offering an income potential of $90.

The annualized return by writing covered calls in November is 13.10%.

Chart for AES


Telecommunications Focus: Income Opportunities

A September covered call on TMUS at strike $46.00 using 300 shares is offering an income potential of $138. In October, a strike 46.00 covered call offers $444 and in November, a strike 46.00 covered call offers $465 in premium.

The annualized return by writing covered calls in September is 73.85%, in October is 30.38% and in November is 18.75%.

Chart for TMUS

An October covered call on S at strike $7.00 using 300 shares is offering an income potential of $156. In November, a strike 7.00 covered call offers $207 in premium.

The annualized return by writing covered calls in October is 74.14% and in November is 59.45%.

Chart for S

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

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