Income Alerts Newsletter for 09/23/2016

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 $119.50 for October 14 2016 are offering a 0.87% return, which annualizes at a rate of 14.47%.

Chart for QQQ

The DIA options at strike $184.00 for October 14 2016 are offering a 0.95% return, which annualizes at a rate of 15.68%.

Chart for DIA

The SPY options at strike $217.50 for October 12 2016 are offering a 0.83% return, which annualizes at a rate of 15.17%.

Chart for SPY


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $64.00 using 300 shares is offering an income potential of $294. In November, a strike 65.00 covered call offers $540 and in December, a strike 65.00 covered call offers $594 in premium.

The annualized return by writing covered calls in October is 19.07%, in November is 18.35% and in December is 13.66%.

Chart for QCOM

An October covered call on AAPL at strike $115.00 using 300 shares is offering an income potential of $651. In November, a strike 115.00 covered call offers $1,185 and in December, a strike 115.00 covered call offers $1,365 in premium.

The annualized return by writing covered calls in October is 23.48%, in November is 22.46% and in December is 17.54%.

Chart for AAPL


Energy Focus: Income Opportunities

An October covered call on HAL at strike $43.00 using 300 shares is offering an income potential of $345. In November, a strike 43.00 covered call offers $522 and in December, a strike 43.00 covered call offers $660 in premium.

The annualized return by writing covered calls in October is 33.71%, in November is 26.77% and in December is 23.08%.

Chart for HAL

An October covered call on APC at strike $61.50 using 300 shares is offering an income potential of $657. In November, a strike 62.50 covered call offers $852 and in January, a strike 62.50 covered call offers $1,260 in premium.

The annualized return by writing covered calls in October is 45.15%, in November is 30.62% and in January is 22.22%.

Chart for APC


Healthcare Focus: Income Opportunities

An October covered call on HCA at strike $76.50 using 300 shares is offering an income potential of $540. In November, a strike 77.50 covered call offers $705 and in December, a strike 77.50 covered call offers $885 in premium.

The annualized return by writing covered calls in October is 29.36%, in November is 19.98% and in December is 17.05%.

Chart for HCA

An October covered call on JNJ at strike $120.00 using 300 shares is offering an income potential of $393. In November, a strike 120.00 covered call offers $516 and in December, a strike 120.00 covered call offers $720 in premium.

The annualized return by writing covered calls in October is 13.49%, in November is 9.19% and in December is 8.70%.

Chart for JNJ


Consumer Staples Focus: Income Opportunities

An October covered call on KO at strike $43.00 using 300 shares is offering an income potential of $171. In November, a strike 43.00 covered call offers $279 and in December, a strike 43.00 covered call offers $321 in premium.

The annualized return by writing covered calls in October is 16.36%, in November is 13.92% and in December is 10.84%.

Chart for KO

An October covered call on PEP at strike $108.00 using 300 shares is offering an income potential of $447. In November, a strike 110.00 covered call offers $378 and in December, a strike 110.00 covered call offers $465 in premium.

The annualized return by writing covered calls in October is 17.05%, in November is 7.44% and in December is 6.19%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

An October covered call on FOXA at strike $24.50 using 300 shares is offering an income potential of $135. In November, a strike 25.00 covered call offers $195 and in January, a strike 25.00 covered call offers $285 in premium.

The annualized return by writing covered calls in October is 22.96%, in November is 17.30% and in January is 12.27%.

Chart for FOXA

An October covered call on CMCSA at strike $67.50 using 300 shares is offering an income potential of $258. In November, a strike 67.50 covered call offers $495 and in December, a strike 67.50 covered call offers $636 in premium.

The annualized return by writing covered calls in October is 15.75%, in November is 15.82% and in December is 13.80%.

Chart for CMCSA


Financials Focus: Income Opportunities

An October covered call on AXP at strike $65.00 using 300 shares is offering an income potential of $366. In November, a strike 65.00 covered call offers $549 and in December, a strike 65.00 covered call offers $657 in premium.

The annualized return by writing covered calls in October is 23.41%, in November is 18.34% and in December is 14.89%.

Chart for AXP

An October covered call on JPM at strike $67.50 using 300 shares is offering an income potential of $315. In November, a strike 67.50 covered call offers $486 and in December, a strike 67.50 covered call offers $621 in premium.

The annualized return by writing covered calls in October is 19.26%, in November is 15.50% and in December is 13.45%.

Chart for JPM


Industrials Focus: Income Opportunities

An October covered call on HTZ at strike $50.00 using 300 shares is offering an income potential of $330. In November, a strike 50.00 covered call offers $675 and in January, a strike 50.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in October is 28.65%, in November is 31.08% and in January is 25.30%.

Chart for HTZ

An October covered call on UNP at strike $95.50 using 300 shares is offering an income potential of $720. In November, a strike 97.50 covered call offers $642 and in December, a strike 97.50 covered call offers $714 in premium.

The annualized return by writing covered calls in October is 31.51%, in November is 14.49% and in December is 10.90%.

Chart for UNP


Materials Focus: Income Opportunities

An October covered call on NEM at strike $41.00 using 300 shares is offering an income potential of $507. In November, a strike 41.00 covered call offers $714 and in December, a strike 41.00 covered call offers $900 in premium.

The annualized return by writing covered calls in October is 52.61%, in November is 39.01% and in December is 33.71%.

Chart for NEM

An October covered call on FCX at strike $11.00 using 300 shares is offering an income potential of $195. In November, a strike 11.00 covered call offers $279 and in December, a strike 11.00 covered call offers $330 in premium.

The annualized return by writing covered calls in October is 76.56%, in November is 58.23% and in December is 47.25%.

Chart for FCX


Utilities Focus: Income Opportunities

An October covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $195. In November, a strike 67.50 covered call offers $330 and in January, a strike 67.50 covered call offers $540 in premium.

The annualized return by writing covered calls in October is 11.99%, in November is 10.57% and in January is 8.38%.

Chart for AEP

An October covered call on DUK at strike $85.00 using 300 shares is offering an income potential of $105. In November, a strike 85.00 covered call offers $255 and in December, a strike 85.00 covered call offers $315 in premium.

The annualized return by writing covered calls in October is 5.18%, in November is 6.55% and in December is 5.47%.

Chart for DUK


Telecommunications Focus: Income Opportunities

An October covered call on VZ at strike $52.50 using 300 shares is offering an income potential of $183. In November, a strike 52.50 covered call offers $291 and in December, a strike 52.50 covered call offers $369 in premium.

The annualized return by writing covered calls in October is 14.34%, in November is 11.88% and in December is 10.21%.

Chart for VZ

An October covered call on T at strike $41.50 using 300 shares is offering an income potential of $84. In November, a strike 42.00 covered call offers $123 and in December, a strike 42.00 covered call offers $174 in premium.

The annualized return by writing covered calls in October is 8.34%, in November is 6.34% and in December is 6.07%.

Chart for T

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

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