Income Alerts Newsletter for 10/05/2016

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 $118.50 for October 28 2016 are offering a 1.40% return, which annualizes at a rate of 21.23%.

Chart for QQQ


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $67.00 using 300 shares is offering an income potential of $330. In November, a strike 67.50 covered call offers $720 and in December, a strike 67.50 covered call offers $798 in premium.

The annualized return by writing covered calls in October is 34.01%, in November is 29.63% and in December is 20.49%.

Chart for QCOM

An October covered call on AAPL at strike $114.00 using 300 shares is offering an income potential of $537. In November, a strike 115.00 covered call offers $882 in premium.

The annualized return by writing covered calls in October is 32.65% and in November is 21.20%.

Chart for AAPL


Energy Focus: Income Opportunities

An October covered call on CVX at strike $102.00 using 300 shares is offering an income potential of $345. In November, a strike 105.00 covered call offers $324 and in December, a strike 105.00 covered call offers $462 in premium.

The annualized return by writing covered calls in October is 23.29%, in November is 8.55% and in December is 7.62%.

Chart for CVX

An October covered call on HES at strike $52.50 using 300 shares is offering an income potential of $456. In November, a strike 52.50 covered call offers $894 and in December, a strike 52.50 covered call offers $1,095 in premium.

The annualized return by writing covered calls in October is 60.76%, in November is 47.99% and in December is 37.04%.

Chart for HES


Healthcare Focus: Income Opportunities

An October covered call on JNJ at strike $119.00 using 300 shares is offering an income potential of $393. In November, a strike 120.00 covered call offers $486 and in December, a strike 120.00 covered call offers $642 in premium.

The annualized return by writing covered calls in October is 22.61%, in November is 10.97% and in December is 9.05%.

Chart for JNJ

An October covered call on MRK at strike $62.50 using 300 shares is offering an income potential of $402. In November, a strike 62.50 covered call offers $576 and in December, a strike 62.50 covered call offers $669 in premium.

The annualized return by writing covered calls in October is 44.46%, in November is 25.16% and in December is 18.26%.

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 $201. In November, a strike 43.00 covered call offers $396 and in December, a strike 43.00 covered call offers $474 in premium.

The annualized return by writing covered calls in October is 32.26%, in November is 25.26% and in December is 18.91%.

Chart for ADM

An October covered call on PEP at strike $108.00 using 300 shares is offering an income potential of $237. In November, a strike 110.00 covered call offers $255 and in December, a strike 110.00 covered call offers $357 in premium.

The annualized return by writing covered calls in October is 15.07%, in November is 6.35% and in December is 5.54%.

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 $75. 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 20.70%, in November is 23.10% and in January is 14.84%.

Chart for FOXA

An October covered call on CBS at strike $56.00 using 300 shares is offering an income potential of $255. In November, a strike 57.50 covered call offers $330 and in December, a strike 57.50 covered call offers $435 in premium.

The annualized return by writing covered calls in October is 31.51%, in November is 16.03% and in December is 13.22%.

Chart for CBS


Financials Focus: Income Opportunities

An October covered call on JPM at strike $67.00 using 300 shares is offering an income potential of $315. In November, a strike 67.50 covered call offers $441 and in December, a strike 67.50 covered call offers $579 in premium.

The annualized return by writing covered calls in October is 32.48%, in November is 17.91% and in December is 14.72%.

Chart for JPM

An October covered call on MET at strike $45.00 using 300 shares is offering an income potential of $246. In November, a strike 45.00 covered call offers $420 and in December, a strike 45.00 covered call offers $534 in premium.

The annualized return by writing covered calls in October is 37.75%, in November is 25.55% and in December is 20.38%.

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 $465. In November, a strike 40.00 covered call offers $735 and in January, a strike 40.00 covered call offers $1,110 in premium.

The annualized return by writing covered calls in October is 81.83%, in November is 51.83% and in January is 34.17%.

Chart for HTZ

An October covered call on UNP at strike $97.00 using 300 shares is offering an income potential of $615. In November, a strike 97.50 covered call offers $816 and in December, a strike 97.50 covered call offers $960 in premium.

The annualized return by writing covered calls in October is 43.93%, in November is 22.97% and in December is 16.89%.

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 $237. In November, a strike 25.00 covered call offers $378 and in January, a strike 25.00 covered call offers $561 in premium.

The annualized return by writing covered calls in October is 67.85%, in November is 43.21% and in January is 27.79%.

Chart for CF

An October covered call on HUN at strike $16.00 using 300 shares is offering an income potential of $135. In November, a strike 16.00 covered call offers $270 and in January, a strike 16.00 covered call offers $435 in premium.

The annualized return by writing covered calls in October is 59.33%, in November is 47.83% and in January is 33.77%.

Chart for HUN


Telecommunications Focus: Income Opportunities

An October covered call on TMUS at strike $47.00 using 300 shares is offering an income potential of $276. In November, a strike 47.00 covered call offers $540 and in January, a strike 47.00 covered call offers $834 in premium.

The annualized return by writing covered calls in October is 40.71%, in November is 31.77% and in January is 21.17%.

Chart for TMUS

A November covered call on S at strike $7.00 using 300 shares is offering an income potential of $129. In December, a strike 7.00 covered call offers $162 in premium.

The annualized return by writing covered calls in November is 54.42% 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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