Income Alerts Newsletter for 09/30/2016

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 $118.00 for October 22 2016 are offering a 1.32% return, which annualizes at a rate of 20.88%.

Chart for QQQ


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $67.50 using 300 shares is offering an income potential of $438. In November, a strike 67.50 covered call offers $783 and in December, a strike 67.50 covered call offers $858 in premium.

The annualized return by writing covered calls in October is 35.11%, in November is 28.81% and in December is 20.46%.

Chart for QCOM

An October covered call on BABA at strike $106.00 using 300 shares is offering an income potential of $810. In November, a strike 110.00 covered call offers $1,200 and in January, a strike 110.00 covered call offers $1,695 in premium.

The annualized return by writing covered calls in October is 41.66%, in November is 28.19% and in January is 18.11%.

Chart for BABA


Energy Focus: Income Opportunities

An October covered call on CVX at strike $102.00 using 300 shares is offering an income potential of $447. In November, a strike 105.00 covered call offers $360 and in December, a strike 105.00 covered call offers $477 in premium.

The annualized return by writing covered calls in October is 23.70%, in November is 8.58% and in December is 7.37%.

Chart for CVX

An October covered call on HAL at strike $44.50 using 300 shares is offering an income potential of $372. In November, a strike 45.00 covered call offers $489 and in December, a strike 45.00 covered call offers $612 in premium.

The annualized return by writing covered calls in October is 45.83%, in November is 27.42% and in December is 22.37%.

Chart for HAL


Healthcare Focus: Income Opportunities

An October covered call on MRK at strike $62.00 using 300 shares is offering an income potential of $396. In November, a strike 62.50 covered call offers $501 and in December, a strike 62.50 covered call offers $588 in premium.

The annualized return by writing covered calls in October is 34.57%, in November is 19.84% and in December is 15.11%.

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 $396. In November, a strike 110.00 covered call offers $354 and in December, a strike 110.00 covered call offers $495 in premium.

The annualized return by writing covered calls in October is 19.68%, in November is 7.92% and in December is 7.18%.

Chart for PEP

An October covered call on PG at strike $88.50 using 300 shares is offering an income potential of $273. In November, a strike 90.00 covered call offers $324 and in December, a strike 90.00 covered call offers $414 in premium.

The annualized return by writing covered calls in October is 16.54%, in November is 8.87% and in December is 7.34%.

Chart for PG


Consumer Discretionary Focus: Income Opportunities

An October covered call on CBS at strike $55.00 using 300 shares is offering an income potential of $363. In November, a strike 55.00 covered call offers $594 and in December, a strike 55.00 covered call offers $705 in premium.

The annualized return by writing covered calls in October is 35.99%, in November is 26.95% and in December is 20.79%.

Chart for CBS

An October covered call on CMCSA at strike $66.50 using 300 shares is offering an income potential of $246. In November, a strike 67.50 covered call offers $363 and in December, a strike 67.50 covered call offers $489 in premium.

The annualized return by writing covered calls in October is 19.89%, in November is 13.31% and in December is 11.65%.

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 $213. In November, a strike 32.00 covered call offers $243 and in December, a strike 32.00 covered call offers $333 in premium.

The annualized return by writing covered calls in October is 37.15%, in November is 19.18% and in December is 17.13%.

Chart for MS

An October covered call on MET at strike $44.00 using 300 shares is offering an income potential of $261. In November, a strike 45.00 covered call offers $291 and in December, a strike 45.00 covered call offers $399 in premium.

The annualized return by writing covered calls in October is 32.27%, in November is 16.26% and in December is 14.52%.

Chart for MET


Industrials Focus: Income Opportunities

An October covered call on HTZ at strike $40.00 using 300 shares is offering an income potential of $330. In November, a strike 40.00 covered call offers $645 and in January, a strike 40.00 covered call offers $990 in premium.

The annualized return by writing covered calls in October is 46.30%, in November is 41.98% and in January is 29.76%.

Chart for HTZ

An October covered call on UNP at strike $96.00 using 300 shares is offering an income potential of $708. In November, a strike 97.50 covered call offers $717 and in December, a strike 97.50 covered call offers $855 in premium.

The annualized return by writing covered calls in October is 40.01%, in November is 18.28% and in December is 14.14%.

Chart for UNP


Materials Focus: Income Opportunities

An October covered call on CF at strike $24.50 using 300 shares is offering an income potential of $231. In November, a strike 25.00 covered call offers $387 and in January, a strike 25.00 covered call offers $549 in premium.

The annualized return by writing covered calls in October is 52.15%, in November is 40.30% and in January is 26.19%.

Chart for CF

An October covered call on FCX at strike $11.00 using 300 shares is offering an income potential of $138. In November, a strike 11.00 covered call offers $231 and in December, a strike 11.00 covered call offers $288 in premium.

The annualized return by writing covered calls in October is 71.36%, in November is 55.55% and in December is 45.59%.

Chart for FCX


Utilities Focus: Income Opportunities

A November covered call on CNP at strike $24.00 using 300 shares is offering an income potential of $165. In January, a strike 24.00 covered call offers $210 in premium.

The annualized return by writing covered calls in November is 17.09% and in January is 9.80%.

Chart for CNP

An October covered call on AES at strike $13.00 using 300 shares is offering an income potential of $105. In November, a strike 13.00 covered call offers $120 and in February, a strike 13.00 covered call offers $255 in premium.

The annualized return by writing covered calls in October is 44.26%, in November is 22.90% and in February is 18.13%.

Chart for AES


Telecommunications Focus: Income Opportunities

An October covered call on TMUS at strike $46.50 using 300 shares is offering an income potential of $357. In November, a strike 47.00 covered call offers $579 and in January, a strike 47.00 covered call offers $828 in premium.

The annualized return by writing covered calls in October is 41.72%, in November is 31.02% and in January is 20.22%.

Chart for TMUS

A November covered call on S at strike $7.00 using 300 shares is offering an income potential of $132. In December, a strike 7.00 covered call offers $171 in premium.

The annualized return by writing covered calls in November is 50.63% and in December is 43.24%.

Chart for S

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

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