Income Alerts Newsletter for 09/29/2016

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 16.06%.

Chart for QQQ

The DIA options at strike $183.50 for October 22 2016 are offering a 0.89% return, which annualizes at a rate of 13.58%.

Chart for DIA

The SPY options at strike $217.00 for October 19 2016 are offering a 0.88% return, which annualizes at a rate of 15.38%.

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 $303. In November, a strike 65.00 covered call offers $480 and in December, a strike 65.00 covered call offers $540 in premium.

The annualized return by writing covered calls in October is 24.60%, in November is 18.16% and in December is 13.32%.

Chart for QCOM

An October covered call on BABA at strike $109.00 using 300 shares is offering an income potential of $858. In November, a strike 110.00 covered call offers $1,605 and in January, a strike 110.00 covered call offers $2,070 in premium.

The annualized return by writing covered calls in October is 41.08%, in November is 36.32% and in January is 21.50%.

Chart for BABA


Energy Focus: Income Opportunities

An October covered call on CVX at strike $103.00 using 300 shares is offering an income potential of $393. In November, a strike 105.00 covered call offers $429 and in December, a strike 105.00 covered call offers $510 in premium.

The annualized return by writing covered calls in October is 19.76%, in November is 9.97% and in December is 7.72%.

Chart for CVX

An October covered call on HAL at strike $43.00 using 300 shares is offering an income potential of $357. In November, a strike 43.00 covered call offers $540 and in December, a strike 43.00 covered call offers $669 in premium.

The annualized return by writing covered calls in October is 43.50%, in November is 30.82% and in December is 25.08%.

Chart for HAL


Healthcare Focus: Income Opportunities

An October covered call on JNJ at strike $120.00 using 300 shares is offering an income potential of $363. In November, a strike 120.00 covered call offers $537 and in December, a strike 120.00 covered call offers $693 in premium.

The annualized return by writing covered calls in October is 15.57%, in November is 10.68% and in December is 9.00%.

Chart for JNJ

An October covered call on MRK at strike $63.50 using 300 shares is offering an income potential of $372. In November, a strike 65.00 covered call offers $339 and in December, a strike 65.00 covered call offers $411 in premium.

The annualized return by writing covered calls in October is 30.39%, in November is 12.76% and in December is 10.09%.

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 $288. In November, a strike 110.00 covered call offers $309 and in December, a strike 110.00 covered call offers $378 in premium.

The annualized return by writing covered calls in October is 13.72%, in November is 6.80% and in December is 5.42%.

Chart for PEP

An October covered call on STZ at strike $170.00 using 300 shares is offering an income potential of $570. In November, a strike 170.00 covered call offers $825 and in January, a strike 170.00 covered call offers $1,590 in premium.

The annualized return by writing covered calls in October is 17.68%, in November is 11.88% and in January is 10.51%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

An October covered call on FOXA at strike $24.50 using 300 shares is offering an income potential of $75. In November, a strike 25.00 covered call offers $150 and in January, a strike 25.00 covered call offers $285 in premium.

The annualized return by writing covered calls in October is 15.80%, in November is 14.74% and in January is 12.91%.

Chart for FOXA

An October covered call on CBS at strike $54.50 using 300 shares is offering an income potential of $276. In November, a strike 55.00 covered call offers $471 and in December, a strike 55.00 covered call offers $507 in premium.

The annualized return by writing covered calls in October is 26.29%, in November is 20.96% and in December is 14.70%.

Chart for CBS


Financials Focus: Income Opportunities

An October covered call on MS at strike $32.00 using 300 shares is offering an income potential of $225. In November, a strike 32.00 covered call offers $312 and in December, a strike 32.00 covered call offers $399 in premium.

The annualized return by writing covered calls in October is 36.77%, in November is 23.76% and in December is 19.93%.

Chart for MS

An October covered call on BAC at strike $15.50 using 300 shares is offering an income potential of $111. In November, a strike 16.00 covered call offers $90 and in December, a strike 16.00 covered call offers $126 in premium.

The annualized return by writing covered calls in October is 37.49%, in November is 13.96% and in December is 12.81%.

Chart for BAC


Industrials Focus: Income Opportunities

An October covered call on UPS at strike $110.00 using 300 shares is offering an income potential of $291. In November, a strike 110.00 covered call offers $552 and in December, a strike 110.00 covered call offers $675 in premium.

The annualized return by writing covered calls in October is 13.62%, in November is 12.02% and in December is 9.59%.

Chart for UPS

An October covered call on HTZ at strike $42.50 using 300 shares is offering an income potential of $180. In November, a strike 42.50 covered call offers $540 and in January, a strike 42.50 covered call offers $855 in premium.

The annualized return by writing covered calls in October is 23.00%, in November is 32.84% and in January is 24.17%.

Chart for HTZ


Materials Focus: Income Opportunities

An October covered call on CF at strike $24.00 using 300 shares is offering an income potential of $270. In November, a strike 25.00 covered call offers $321 and in January, a strike 25.00 covered call offers $507 in premium.

The annualized return by writing covered calls in October is 59.38%, in November is 32.83% and in January is 24.10%.

Chart for CF

An October covered call on FCX at strike $11.00 using 300 shares is offering an income potential of $162. In November, a strike 11.00 covered call offers $258 and in December, a strike 11.00 covered call offers $309 in premium.

The annualized return by writing covered calls in October is 79.19%, in November is 60.07% and in December is 47.56%.

Chart for FCX


Utilities Focus: Income Opportunities

A November covered call on CNP at strike $25.00 using 300 shares is offering an income potential of $90. In January, a strike 25.00 covered call offers $135 in premium.

The annualized return by writing covered calls in November is 8.84% and in January is 6.03%.

Chart for CNP

An October covered call on D at strike $77.50 using 300 shares is offering an income potential of $120. In November, a strike 77.50 covered call offers $330 and in January, a strike 77.50 covered call offers $465 in premium.

The annualized return by writing covered calls in October is 8.06%, in November is 10.33% and in January is 6.62%.

Chart for D


Telecommunications Focus: Income Opportunities

An October covered call on SBAC at strike $115.00 using 300 shares is offering an income potential of $345. In November, a strike 115.00 covered call offers $840 and in December, a strike 115.00 covered call offers $1,080 in premium.

The annualized return by writing covered calls in October is 15.62%, in November is 17.81% and in December is 14.99%.

Chart for SBAC

An October covered call on TMUS at strike $47.00 using 300 shares is offering an income potential of $336. In November, a strike 47.00 covered call offers $579 and in January, a strike 47.00 covered call offers $837 in premium.

The annualized return by writing covered calls in October is 37.25%, in November is 30.16% and in January is 20.10%.

Chart for TMUS

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

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