Income Alerts Newsletter for 09/20/2016

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 $117.00 for October 14 2016 are offering a 1.49% return, which annualizes at a rate of 21.83%.

Chart for QQQ


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $63.00 using 300 shares is offering an income potential of $402. In November, a strike 65.00 covered call offers $516 and in December, a strike 65.00 covered call offers $555 in premium.

The annualized return by writing covered calls in October is 24.09%, in November is 16.83% and in December is 12.44%.

Chart for QCOM

An October covered call on BABA at strike $104.00 using 300 shares is offering an income potential of $795. In November, a strike 105.00 covered call offers $1,665 and in January, a strike 105.00 covered call offers $1,785 in premium.

The annualized return by writing covered calls in October is 29.20%, in November is 34.07% and in January is 18.04%.

Chart for BABA


Energy Focus: Income Opportunities

An October covered call on APC at strike $60.00 using 300 shares is offering an income potential of $381. In November, a strike 60.00 covered call offers $720 and in January, a strike 60.00 covered call offers $1,095 in premium.

The annualized return by writing covered calls in October is 24.97%, in November is 26.05% and in January is 19.94%.

Chart for APC

An October covered call on EOG at strike $91.00 using 300 shares is offering an income potential of $732. In November, a strike 92.50 covered call offers $945 and in January, a strike 92.50 covered call offers $1,500 in premium.

The annualized return by writing covered calls in October is 30.80%, in November is 21.69% and in January is 17.30%.

Chart for EOG


Healthcare Focus: Income Opportunities

An October covered call on GILD at strike $79.00 using 300 shares is offering an income potential of $576. In November, a strike 80.00 covered call offers $891 and in December, a strike 80.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in October is 27.55%, in November is 23.38% and in December is 19.58%.

Chart for GILD

An October covered call on MRK at strike $62.50 using 300 shares is offering an income potential of $219. In November, a strike 62.50 covered call offers $378 and in December, a strike 65.00 covered call offers $198 in premium.

The annualized return by writing covered calls in October is 13.32%, in November is 12.55% and in December is 4.46%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An October covered call on PG at strike $88.50 using 300 shares is offering an income potential of $351. In November, a strike 90.00 covered call offers $381 and in December, a strike 90.00 covered call offers $468 in premium.

The annualized return by writing covered calls in October is 14.84%, in November is 8.72% and in December is 7.37%.

Chart for PG


Consumer Discretionary Focus: Income Opportunities

An October covered call on CMCSA at strike $66.00 using 300 shares is offering an income potential of $312. In January, a strike 67.50 covered call offers $570 and in April, a strike 67.50 covered call offers $888 in premium.

The annualized return by writing covered calls in October is 17.75%, in January is 8.75% and in April is 7.99%.

Chart for CMCSA

An October covered call on GM at strike $32.00 using 300 shares is offering an income potential of $225. In November, a strike 32.00 covered call offers $321 and in December, a strike 32.00 covered call offers $375 in premium.

The annualized return by writing covered calls in October is 26.79%, in November is 20.89% and in December is 16.82%.

Chart for GM


Financials Focus: Income Opportunities

An October covered call on BAC at strike $16.00 using 300 shares is offering an income potential of $96. In November, a strike 16.00 covered call offers $135 and in December, a strike 16.00 covered call offers $171 in premium.

The annualized return by writing covered calls in October is 23.18%, in November is 17.78% and in December is 15.56%.

Chart for BAC

An October covered call on GS at strike $167.50 using 300 shares is offering an income potential of $1,110. In November, a strike 170.00 covered call offers $1,260 and in January, a strike 170.00 covered call offers $1,965 in premium.

The annualized return by writing covered calls in October is 25.18%, in November is 15.51% and in January is 12.08%.

Chart for GS


Industrials Focus: Income Opportunities

An October covered call on UNP at strike $95.00 using 300 shares is offering an income potential of $519. In November, a strike 95.00 covered call offers $750 and in December, a strike 95.00 covered call offers $855 in premium.

The annualized return by writing covered calls in October is 20.94%, in November is 16.51% and in December is 12.95%.

Chart for UNP

An October covered call on HTZ at strike $50.00 using 300 shares is offering an income potential of $360. In November, a strike 50.00 covered call offers $750 and in January, a strike 50.00 covered call offers $1,350 in premium.

The annualized return by writing covered calls in October is 28.32%, in November is 32.83% and in January is 30.41%.

Chart for HTZ


Materials Focus: Income Opportunities

An October covered call on DOW at strike $55.00 using 300 shares is offering an income potential of $102. In November, a strike 55.00 covered call offers $264 and in December, a strike 55.00 covered call offers $387 in premium.

The annualized return by writing covered calls in October is 7.14%, in November is 10.10% and in December is 10.23%.

Chart for DOW

An October covered call on LYB at strike $80.00 using 300 shares is offering an income potential of $465. In November, a strike 80.00 covered call offers $765 and in December, a strike 80.00 covered call offers $900 in premium.

The annualized return by writing covered calls in October is 22.30%, in November is 20.11% and in December is 16.31%.

Chart for LYB


Utilities Focus: Income Opportunities

An October covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $120. In November, a strike 67.50 covered call offers $240 and in January, a strike 67.50 covered call offers $435 in premium.

The annualized return by writing covered calls in October is 6.80%, in November is 7.41% and in January is 6.67%.

Chart for AEP

A November covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $105. In January, a strike 24.00 covered call offers $165 in premium.

The annualized return by writing covered calls in November is 9.13% and in January is 7.12%.

Chart for CNP


Telecommunications Focus: Income Opportunities

An October covered call on TMUS at strike $46.00 using 300 shares is offering an income potential of $522. In November, a strike 46.00 covered call offers $630 and in January, a strike 46.00 covered call offers $975 in premium.

The annualized return by writing covered calls in October is 43.55%, in November is 28.67% and in January is 22.41%.

Chart for TMUS

An October covered call on S at strike $7.00 using 300 shares is offering an income potential of $78. In November, a strike 7.00 covered call offers $150 and in January, a strike 7.00 covered call offers $213 in premium.

The annualized return by writing covered calls in October is 45.00%, in November is 48.65% and in January is 35.18%.

Chart for S

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

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