Income Alerts Newsletter for 10/04/2016

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 28 2016 are offering a 1.22% return, which annualizes at a rate of 17.83%.

Chart for QQQ

The SPY options at strike $216.00 for October 26 2016 are offering a 1.06% return, which annualizes at a rate of 16.80%.

Chart for SPY


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $67.50 using 300 shares is offering an income potential of $393. In November, a strike 67.50 covered call offers $744 and in December, a strike 67.50 covered call offers $834 in premium.

The annualized return by writing covered calls in October is 38.25%, in November is 29.80% and in December is 21.03%.

Chart for QCOM

An October covered call on BABA at strike $106.00 using 300 shares is offering an income potential of $642. In November, a strike 110.00 covered call offers $1,065 and in January, a strike 110.00 covered call offers $1,545 in premium.

The annualized return by writing covered calls in October is 39.82%, in November is 27.07% and in January is 17.05%.

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 $414. In November, a strike 105.00 covered call offers $417 and in December, a strike 105.00 covered call offers $543 in premium.

The annualized return by writing covered calls in October is 26.23%, in November is 10.68% and in December is 8.75%.

Chart for CVX

An October covered call on HAL at strike $45.00 using 300 shares is offering an income potential of $348. In November, a strike 45.00 covered call offers $558 and in December, a strike 45.00 covered call offers $684 in premium.

The annualized return by writing covered calls in October is 50.95%, in November is 33.56% and in December is 26.03%.

Chart for HAL


Healthcare Focus: Income Opportunities

An October covered call on JNJ at strike $119.00 using 300 shares is offering an income potential of $459. In November, a strike 120.00 covered call offers $516 and in December, a strike 120.00 covered call offers $648 in premium.

The annualized return by writing covered calls in October is 25.06%, in November is 11.41% and in December is 9.01%.

Chart for JNJ

An October covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $327. In November, a strike 65.00 covered call offers $258 and in December, a strike 65.00 covered call offers $333 in premium.

The annualized return by writing covered calls in October is 34.09%, in November is 10.83% and in December is 8.80%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An October covered call on ADM at strike $43.00 using 300 shares is offering an income potential of $210. In November, a strike 43.00 covered call offers $399 and in December, a strike 43.00 covered call offers $480 in premium.

The annualized return by writing covered calls in October is 31.87%, in November is 24.85% and in December is 18.85%.

Chart for ADM

An October covered call on PEP at strike $109.00 using 300 shares is offering an income potential of $243. In November, a strike 110.00 covered call offers $363 and in December, a strike 110.00 covered call offers $477 in premium.

The annualized return by writing covered calls in October is 14.48%, in November is 8.78% and in December is 7.25%.

Chart for PEP


Consumer Discretionary Focus: Income Opportunities

An October covered call on FOXA at strike $25.00 using 300 shares is offering an income potential of $90. In November, a strike 25.00 covered call offers $210 and in January, a strike 25.00 covered call offers $315 in premium.

The annualized return by writing covered calls in October is 23.59%, in November is 22.62% and in January is 14.71%.

Chart for FOXA

An October covered call on CBS at strike $55.00 using 300 shares is offering an income potential of $336. In November, a strike 55.00 covered call offers $567 and in December, a strike 55.00 covered call offers $672 in premium.

The annualized return by writing covered calls in October is 39.98%, in November is 27.67% and in December is 20.69%.

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 $246. In November, a strike 32.00 covered call offers $351 and in December, a strike 32.00 covered call offers $444 in premium.

The annualized return by writing covered calls in October is 50.60%, in November is 29.52% and in December is 23.64%.

Chart for MS

An October covered call on BAC at strike $16.00 using 300 shares is offering an income potential of $72. In November, a strike 16.00 covered call offers $129 and in December, a strike 16.00 covered call offers $171 in premium.

The annualized return by writing covered calls in October is 29.96%, in November is 21.97% and in December is 18.42%.

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 $243. In November, a strike 110.00 covered call offers $534 and in December, a strike 110.00 covered call offers $651 in premium.

The annualized return by writing covered calls in October is 14.36%, in November is 12.87% and in December is 9.87%.

Chart for UPS

An October covered call on HTZ at strike $40.00 using 300 shares is offering an income potential of $375. In November, a strike 40.00 covered call offers $720 and in January, a strike 40.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in October is 62.57%, in November is 50.06% and in January is 34.17%.

Chart for HTZ


Materials Focus: Income Opportunities

An October covered call on CF at strike $24.50 using 300 shares is offering an income potential of $219. In November, a strike 25.00 covered call offers $345 and in January, a strike 25.00 covered call offers $531 in premium.

The annualized return by writing covered calls in October is 59.73%, in November is 38.73% and in January is 26.17%.

Chart for CF

An October covered call on FCX at strike $11.00 using 300 shares is offering an income potential of $108. In November, a strike 11.00 covered call offers $216 and in December, a strike 11.00 covered call offers $279 in premium.

The annualized return by writing covered calls in October is 66.95%, in November is 56.08% and in December is 46.37%.

Chart for FCX


Telecommunications Focus: Income Opportunities

An October covered call on TMUS at strike $47.00 using 300 shares is offering an income potential of $312. In November, a strike 47.00 covered call offers $570 and in January, a strike 47.00 covered call offers $840 in premium.

The annualized return by writing covered calls in October is 43.58%, in November is 32.80% and in January is 21.08%.

Chart for TMUS

A November covered call on S at strike $7.00 using 300 shares is offering an income potential of $117. In December, a strike 7.00 covered call offers $147 in premium.

The annualized return by writing covered calls in November is 49.01% and in December is 39.22%.

Chart for S

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

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