Income Alerts Newsletter for 09/28/2016

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 $119.00 for October 22 2016 are offering a 1.06% return, which annualizes at a rate of 15.44%.

Chart for QQQ

The SPY options at strike $216.00 for October 19 2016 are offering a 0.98% return, which annualizes at a rate of 16.32%.

Chart for SPY


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $63.50 using 300 shares is offering an income potential of $324. In November, a strike 65.00 covered call offers $477 and in December, a strike 65.00 covered call offers $537 in premium.

The annualized return by writing covered calls in October is 25.34%, in November is 17.74% and in December is 13.11%.

Chart for QCOM

An October covered call on BABA at strike $109.00 using 300 shares is offering an income potential of $846. In November, a strike 110.00 covered call offers $1,605 and in January, a strike 110.00 covered call offers $2,145 in premium.

The annualized return by writing covered calls in October is 39.05%, in November is 35.80% and in January is 22.25%.

Chart for BABA


Energy Focus: Income Opportunities

An October covered call on APC at strike $58.50 using 300 shares is offering an income potential of $612. In November, a strike 60.00 covered call offers $744 and in January, a strike 60.00 covered call offers $1,170 in premium.

The annualized return by writing covered calls in October is 52.97%, in November is 30.61% and in January is 22.57%.

Chart for APC

An October covered call on VLO at strike $55.50 using 300 shares is offering an income potential of $363. In November, a strike 57.50 covered call offers $333 and in December, a strike 57.50 covered call offers $468 in premium.

The annualized return by writing covered calls in October is 32.83%, in November is 14.18% and in December is 13.15%.

Chart for VLO


Healthcare Focus: Income Opportunities

An October covered call on JNJ at strike $120.00 using 300 shares is offering an income potential of $345. In November, a strike 120.00 covered call offers $471 and in December, a strike 120.00 covered call offers $675 in premium.

The annualized return by writing covered calls in October is 14.22%, in November is 9.19% and in December is 8.67%.

Chart for JNJ

An October covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $342. In November, a strike 65.00 covered call offers $252 and in December, a strike 65.00 covered call offers $330 in premium.

The annualized return by writing covered calls in October is 27.09%, in November is 9.37% and in December is 8.06%.

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 $393. In November, a strike 110.00 covered call offers $336 and in December, a strike 110.00 covered call offers $429 in premium.

The annualized return by writing covered calls in October is 18.01%, in November is 7.25% and in December is 6.08%.

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 $990 and in January, a strike 170.00 covered call offers $1,800 in premium.

The annualized return by writing covered calls in October is 19.16%, in November is 13.97% and in January is 11.80%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

An October covered call on CBS at strike $52.50 using 300 shares is offering an income potential of $291. In November, a strike 52.50 covered call offers $489 and in December, a strike 52.50 covered call offers $612 in premium.

The annualized return by writing covered calls in October is 27.73%, in November is 22.26% and in December is 18.38%.

Chart for CBS

An October covered call on CMCSA at strike $66.50 using 300 shares is offering an income potential of $237. In November, a strike 67.50 covered call offers $354 and in December, a strike 67.50 covered call offers $474 in premium.

The annualized return by writing covered calls in October is 17.64%, in November is 12.50% and in December is 11.02%.

Chart for CMCSA


Financials Focus: Income Opportunities

An October covered call on MS at strike $31.50 using 300 shares is offering an income potential of $243. In November, a strike 32.00 covered call offers $276 and in December, a strike 32.00 covered call offers $345 in premium.

The annualized return by writing covered calls in October is 38.72%, in November is 20.82% and in December is 17.16%.

Chart for MS

An October covered call on BAC at strike $15.50 using 300 shares is offering an income potential of $102. In November, a strike 16.00 covered call offers $93 and in December, a strike 16.00 covered call offers $126 in premium.

The annualized return by writing covered calls in October is 33.20%, in November is 14.25% and in December is 12.73%.

Chart for BAC


Industrials Focus: Income Opportunities

An October covered call on UPS at strike $111.00 using 300 shares is offering an income potential of $264. In November, a strike 115.00 covered call offers $144 and in December, a strike 115.00 covered call offers $237 in premium.

The annualized return by writing covered calls in October is 11.77%, in November is 3.02% and in December is 3.26%.

Chart for UPS

An October covered call on HTZ at strike $42.50 using 300 shares is offering an income potential of $390. In November, a strike 42.50 covered call offers $690 and in January, a strike 42.50 covered call offers $1,020 in premium.

The annualized return by writing covered calls in October is 47.16%, in November is 40.36% and in January is 28.04%.

Chart for HTZ


Materials Focus: Income Opportunities

An October covered call on LYB at strike $80.00 using 300 shares is offering an income potential of $255. In November, a strike 80.00 covered call offers $585 and in December, a strike 80.00 covered call offers $705 in premium.

The annualized return by writing covered calls in October is 16.13%, in November is 17.71% and in December is 14.04%.

Chart for LYB


Utilities Focus: Income Opportunities

An October covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $90. In November, a strike 24.00 covered call offers $210 and in January, a strike 24.00 covered call offers $330 in premium.

The annualized return by writing covered calls in October is 18.58%, in November is 20.80% and in January is 15.19%.

Chart for CNP

An October covered call on D at strike $77.50 using 300 shares is offering an income potential of $150. In November, a strike 77.50 covered call offers $360 and in January, a strike 77.50 covered call offers $525 in premium.

The annualized return by writing covered calls in October is 9.70%, in November is 11.08% and in January is 7.44%.

Chart for D


Telecommunications Focus: Income Opportunities

An October covered call on VZ at strike $52.50 using 300 shares is offering an income potential of $186. In November, a strike 52.50 covered call offers $276 and in December, a strike 52.50 covered call offers $366 in premium.

The annualized return by writing covered calls in October is 17.45%, in November is 12.29% and in December is 10.72%.

Chart for VZ

An October covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $270. In November, a strike 115.00 covered call offers $705 and in December, a strike 115.00 covered call offers $930 in premium.

The annualized return by writing covered calls in October is 11.84%, in November is 14.77% and in December is 12.84%.

Chart for SBAC

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

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