Income Alerts Newsletter for 09/27/2016

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 22 2016 are offering a 1.45% return, which annualizes at a rate of 20.39%.

Chart for QQQ


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $62.50 using 300 shares is offering an income potential of $342. In November, a strike 62.50 covered call offers $705 and in December, a strike 62.50 covered call offers $765 in premium.

The annualized return by writing covered calls in October is 26.16%, in November is 26.49% and in December is 18.99%.

Chart for QCOM

An October covered call on AAPL at strike $113.00 using 300 shares is offering an income potential of $696. In November, a strike 115.00 covered call offers $960 and in December, a strike 115.00 covered call offers $1,155 in premium.

The annualized return by writing covered calls in October is 29.46%, in November is 19.72% and in December is 15.72%.

Chart for AAPL


Energy Focus: Income Opportunities

An October covered call on APC at strike $59.00 using 300 shares is offering an income potential of $618. In November, a strike 60.00 covered call offers $825 and in January, a strike 60.00 covered call offers $1,245 in premium.

The annualized return by writing covered calls in October is 51.20%, in November is 33.32% and in January is 23.80%.

Chart for APC

An October covered call on EOG at strike $89.50 using 300 shares is offering an income potential of $840. In November, a strike 90.00 covered call offers $1,140 and in December, a strike 90.00 covered call offers $1,470 in premium.

The annualized return by writing covered calls in October is 45.46%, in November is 30.06% and in December is 25.85%.

Chart for EOG


Healthcare Focus: Income Opportunities

An October covered call on GILD at strike $81.00 using 300 shares is offering an income potential of $525. In November, a strike 82.50 covered call offers $789 and in December, a strike 82.50 covered call offers $960 in premium.

The annualized return by writing covered calls in October is 31.15%, in November is 22.79% and in December is 18.40%.

Chart for GILD

An October covered call on MRK at strike $62.50 using 300 shares is offering an income potential of $357. In November, a strike 62.50 covered call offers $525 and in December, a strike 62.50 covered call offers $615 in premium.

The annualized return by writing covered calls in October is 27.40%, in November is 19.58% and in December is 15.18%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An October covered call on PEP at strike $108.00 using 300 shares is offering an income potential of $348. In November, a strike 110.00 covered call offers $324 and in December, a strike 110.00 covered call offers $417 in premium.

The annualized return by writing covered calls in October is 15.38%, in November is 6.89% and in December is 5.86%.

Chart for PEP

An October covered call on STZ at strike $170.00 using 300 shares is offering an income potential of $645. In November, a strike 170.00 covered call offers $960 and in January, a strike 170.00 covered call offers $1,800 in premium.

The annualized return by writing covered calls in October is 18.47%, in November is 13.32% and in January is 11.73%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

An October covered call on GM at strike $32.00 using 300 shares is offering an income potential of $183. In November, a strike 32.00 covered call offers $327 and in December, a strike 32.00 covered call offers $384 in premium.

The annualized return by writing covered calls in October is 27.46%, in November is 23.99% and in December is 18.67%.

Chart for GM

An October covered call on AMZN at strike $800.00 using 300 shares is offering an income potential of $4,635. In November, a strike 800.00 covered call offers $10,395 and in December, a strike 800.00 covered call offers $11,895 in premium.

The annualized return by writing covered calls in October is 27.68%, in November is 30.64% and in December is 23.24%.

Chart for AMZN


Financials Focus: Income Opportunities

An October covered call on JPM at strike $66.00 using 300 shares is offering an income potential of $360. In November, a strike 67.50 covered call offers $339 and in December, a strike 67.50 covered call offers $480 in premium.

The annualized return by writing covered calls in October is 26.09%, in November is 11.81% and in December is 11.10%.

Chart for JPM

An October covered call on MET at strike $43.50 using 300 shares is offering an income potential of $324. In November, a strike 45.00 covered call offers $240 and in December, a strike 45.00 covered call offers $330 in premium.

The annualized return by writing covered calls in October is 35.83%, in November is 12.69% and in December is 11.58%.

Chart for MET


Industrials Focus: Income Opportunities

An October covered call on HTZ at strike $47.50 using 300 shares is offering an income potential of $375. In November, a strike 47.50 covered call offers $810 and in January, a strike 47.50 covered call offers $1,230 in premium.

The annualized return by writing covered calls in October is 39.06%, in November is 41.97% and in January is 30.40%.

Chart for HTZ

An October covered call on UNP at strike $94.50 using 300 shares is offering an income potential of $678. In November, a strike 95.00 covered call offers $840 and in December, a strike 95.00 covered call offers $960 in premium.

The annualized return by writing covered calls in October is 34.52%, in November is 20.71% and in December is 15.66%.

Chart for UNP


Utilities Focus: Income Opportunities

An October covered call on AEP at strike $67.50 using 300 shares is offering an income potential of $165. In November, a strike 67.50 covered call offers $315 and in January, a strike 67.50 covered call offers $570 in premium.

The annualized return by writing covered calls in October is 11.73%, in November is 10.87% and in January is 9.20%.

Chart for AEP

An October covered call on DUK at strike $82.50 using 300 shares is offering an income potential of $330. In November, a strike 82.50 covered call offers $525 and in December, a strike 82.50 covered call offers $630 in premium.

The annualized return by writing covered calls in October is 19.05%, in November is 14.71% and in December is 11.68%.

Chart for DUK


Telecommunications Focus: Income Opportunities

An October covered call on T at strike $41.50 using 300 shares is offering an income potential of $81. In November, a strike 42.00 covered call offers $120 and in December, a strike 42.00 covered call offers $177 in premium.

The annualized return by writing covered calls in October is 9.27%, in November is 6.64% and in December is 6.48%.

Chart for T

An October covered call on TMUS at strike $47.00 using 300 shares is offering an income potential of $369. In November, a strike 47.00 covered call offers $600 and in January, a strike 47.00 covered call offers $882 in premium.

The annualized return by writing covered calls in October is 37.79%, in November is 30.09% and in January is 20.85%.

Chart for TMUS

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

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