Income Alerts Newsletter for 10/07/2016

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 1.14% return, which annualizes at a rate of 18.94%.

Chart for QQQ

The DIA options at strike $183.00 for October 28 2016 are offering a 0.94% return, which annualizes at a rate of 15.60%.

Chart for DIA

The SPY options at strike $216.00 for October 26 2016 are offering a 0.96% return, which annualizes at a rate of 17.59%.

Chart for SPY


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $68.00 using 300 shares is offering an income potential of $369. In November, a strike 70.00 covered call offers $525 and in December, a strike 70.00 covered call offers $612 in premium.

The annualized return by writing covered calls in October is 42.32%, in November is 22.07% and in December is 15.79%.

Chart for QCOM

An October covered call on AAPL at strike $114.00 using 300 shares is offering an income potential of $462. In November, a strike 115.00 covered call offers $945 and in December, a strike 115.00 covered call offers $1,140 in premium.

The annualized return by writing covered calls in October is 31.27%, in November is 23.60% and in December is 17.50%.

Chart for AAPL


Energy Focus: Income Opportunities

An October covered call on CVX at strike $103.00 using 300 shares is offering an income potential of $318. In November, a strike 105.00 covered call offers $396 and in December, a strike 105.00 covered call offers $531 in premium.

The annualized return by writing covered calls in October is 23.91%, in November is 10.86% and in December is 8.94%.

Chart for CVX

An October covered call on HES at strike $54.00 using 300 shares is offering an income potential of $426. In November, a strike 55.00 covered call offers $705 and in December, a strike 55.00 covered call offers $900 in premium.

The annualized return by writing covered calls in October is 62.01%, in November is 37.99% and in December is 30.02%.

Chart for HES


Healthcare Focus: Income Opportunities

An October covered call on MRK at strike $63.00 using 300 shares is offering an income potential of $258. In November, a strike 65.00 covered call offers $255 and in December, a strike 65.00 covered call offers $333 in premium.

The annualized return by writing covered calls in October is 31.75%, in November is 11.41% and in December is 9.14%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An October covered call on ADM at strike $43.50 using 300 shares is offering an income potential of $165. In November, a strike 44.00 covered call offers $300 and in December, a strike 44.00 covered call offers $378 in premium.

The annualized return by writing covered calls in October is 29.45%, in November is 19.68% and in December is 15.24%.

Chart for ADM

An October covered call on STZ at strike $175.00 using 300 shares is offering an income potential of $210. In November, a strike 175.00 covered call offers $690 and in January, a strike 175.00 covered call offers $1,650 in premium.

The annualized return by writing covered calls in October is 9.38%, in November is 11.31% and in January is 11.33%.

Chart for STZ


Consumer Discretionary Focus: Income Opportunities

An October covered call on FOXA at strike $34.00 using 300 shares is offering an income potential of $90. In November, a strike 25.00 covered call offers $180 and in January, a strike 25.00 covered call offers $300 in premium.

The annualized return by writing covered calls in October is 28.24%, in November is 20.80% and in January is 14.50%.

Chart for FOXA

An October covered call on HD at strike $131.00 using 300 shares is offering an income potential of $399. In November, a strike 135.00 covered call offers $450 and in December, a strike 135.00 covered call offers $594 in premium.

The annualized return by writing covered calls in October is 23.55%, in November is 9.67% and in December is 7.83%.

Chart for HD


Financials Focus: Income Opportunities

An October covered call on GS at strike $167.50 using 300 shares is offering an income potential of $990. In November, a strike 170.00 covered call offers $1,260 and in December, a strike 170.00 covered call offers $1,605 in premium.

The annualized return by writing covered calls in October is 45.95%, in November is 21.38% and in December is 16.76%.

Chart for GS

An October covered call on JPM at strike $68.00 using 300 shares is offering an income potential of $309. In November, a strike 70.00 covered call offers $249 and in December, a strike 70.00 covered call offers $384 in premium.

The annualized return by writing covered calls in October is 35.15%, in November is 10.27% and in December is 9.74%.

Chart for JPM


Industrials Focus: Income Opportunities

An October covered call on UPS at strike $110.00 using 300 shares is offering an income potential of $219. In November, a strike 110.00 covered call offers $534 and in December, a strike 110.00 covered call offers $669 in premium.

The annualized return by writing covered calls in October is 15.36%, in November is 13.76% and in December is 10.58%.

Chart for UPS

An October covered call on DHR at strike $80.00 using 300 shares is offering an income potential of $105. In November, a strike 80.00 covered call offers $270 and in December, a strike 80.00 covered call offers $375 in premium.

The annualized return by writing covered calls in October is 10.24%, in November is 9.64% and in December is 8.22%.

Chart for DHR


Materials Focus: Income Opportunities

An October covered call on DOW at strike $54.00 using 300 shares is offering an income potential of $159. In November, a strike 55.00 covered call offers $261 and in December, a strike 55.00 covered call offers $366 in premium.

The annualized return by writing covered calls in October is 22.79%, in November is 13.69% and in December is 11.81%.

Chart for DOW

An October covered call on CF at strike $25.00 using 300 shares is offering an income potential of $171. In November, a strike 25.00 covered call offers $372 and in January, a strike 25.00 covered call offers $567 in premium.

The annualized return by writing covered calls in October is 54.20%, in November is 44.11% and in January is 28.44%.

Chart for CF


Telecommunications Focus: Income Opportunities

A November covered call on S at strike $7.00 using 300 shares is offering an income potential of $105. In December, a strike 7.00 covered call offers $135 in premium.

The annualized return by writing covered calls in November is 46.98% and in December is 37.52%.

Chart for S

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

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