Income Alerts Newsletter for 10/12/2016

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 $117.50 for November 4 2016 are offering a 1.49% return, which annualizes at a rate of 22.73%.

Chart for QQQ

The SPY options at strike $217.00 for June 16 2018 are offering a 8.25% return, which annualizes at a rate of 4.91%.

Chart for SPY


Technology Focus: Income Opportunities

An October covered call on QCOM at strike $66.50 using 300 shares is offering an income potential of $255. In November, a strike 67.50 covered call offers $762 and in December, a strike 67.50 covered call offers $831 in premium.

The annualized return by writing covered calls in October is 43.23%, in November is 37.05% and in December is 23.80%.

Chart for QCOM

An October covered call on BABA at strike $106.00 using 300 shares is offering an income potential of $534. In November, a strike 110.00 covered call offers $1,470 and in January, a strike 110.00 covered call offers $1,905 in premium.

The annualized return by writing covered calls in October is 57.09%, in November is 43.20% and in January is 22.57%.

Chart for BABA


Energy Focus: Income Opportunities

An October covered call on OXY at strike $74.00 using 300 shares is offering an income potential of $285. In November, a strike 75.00 covered call offers $465 and in December, a strike 75.00 covered call offers $738 in premium.

The annualized return by writing covered calls in October is 43.34%, in November is 20.11% and in December is 18.81%.

Chart for OXY

An October covered call on SLB at strike $82.00 using 300 shares is offering an income potential of $396. In November, a strike 82.50 covered call offers $588 and in December, a strike 82.50 covered call offers $723 in premium.

The annualized return by writing covered calls in October is 54.50%, in November is 23.10% and in December is 16.62%.

Chart for SLB


Healthcare Focus: Income Opportunities

An October covered call on HCA at strike $76.00 using 300 shares is offering an income potential of $270. In November, a strike 77.50 covered call offers $525 and in December, a strike 77.50 covered call offers $690 in premium.

The annualized return by writing covered calls in October is 40.02%, in November is 22.20% and in December is 17.11%.

Chart for HCA

An October covered call on MRK at strike $62.00 using 300 shares is offering an income potential of $222. In November, a strike 62.50 covered call offers $414 and in December, a strike 62.50 covered call offers $516 in premium.

The annualized return by writing covered calls in October is 40.12%, in November is 21.32% and in December is 15.56%.

Chart for MRK


Consumer Staples Focus: Income Opportunities

An October covered call on STZ at strike $170.00 using 300 shares is offering an income potential of $555. In November, a strike 170.00 covered call offers $1,110 and in January, a strike 170.00 covered call offers $2,010 in premium.

The annualized return by writing covered calls in October is 36.57%, in November is 20.86% and in January is 14.71%.

Chart for STZ

An October covered call on PG at strike $89.00 using 300 shares is offering an income potential of $156. In November, a strike 90.00 covered call offers $351 and in December, a strike 90.00 covered call offers $423 in premium.

The annualized return by writing covered calls in October is 19.60%, in November is 12.47% and in December is 8.83%.

Chart for PG


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 $195 and in January, a strike 25.00 covered call offers $270 in premium.

The annualized return by writing covered calls in October is 41.02%, in November is 25.39% and in January is 13.58%.

Chart for FOXA

An October covered call on CBS at strike $55.50 using 300 shares is offering an income potential of $237. In November, a strike 57.50 covered call offers $282 and in December, a strike 57.50 covered call offers $402 in premium.

The annualized return by writing covered calls in October is 47.99%, in November is 16.15% and in December is 13.50%.

Chart for CBS


Financials Focus: Income Opportunities

An October covered call on MET at strike $47.50 using 300 shares is offering an income potential of $186. In November, a strike 47.50 covered call offers $426 and in December, a strike 47.50 covered call offers $543 in premium.

The annualized return by writing covered calls in October is 44.10%, in November is 28.99% and in December is 21.69%.

Chart for MET

An October covered call on MS at strike $32.50 using 300 shares is offering an income potential of $159. In November, a strike 33.00 covered call offers $228 and in December, a strike 33.00 covered call offers $318 in premium.

The annualized return by writing covered calls in October is 55.57%, in November is 22.61% and in December is 18.56%.

Chart for MS


Industrials Focus: Income Opportunities

An October covered call on BA at strike $134.00 using 300 shares is offering an income potential of $525. In November, a strike 135.00 covered call offers $1,215 and in December, a strike 135.00 covered call offers $1,170 in premium.

The annualized return by writing covered calls in October is 43.91%, in November is 22.80% and in December is 16.38%.

Chart for BA

An October covered call on HTZ at strike $37.50 using 300 shares is offering an income potential of $105. In November, a strike 37.50 covered call offers $480 and in January, a strike 40.00 covered call offers $585 in premium.

The annualized return by writing covered calls in October is 32.68%, in November is 43.67% and in January is 20.56%.

Chart for HTZ


Materials Focus: Income Opportunities

An October covered call on DOW at strike $54.00 using 300 shares is offering an income potential of $75. In November, a strike 55.00 covered call offers $231 and in December, a strike 55.00 covered call offers $345 in premium.

The annualized return by writing covered calls in October is 15.57%, in November is 13.66% and in December is 11.96%.

Chart for DOW

A November covered call on HUN at strike $17.00 using 300 shares is offering an income potential of $150. In January, a strike 17.00 covered call offers $360 in premium.

The annualized return by writing covered calls in November is 29.92% and in January is 28.74%.

Chart for HUN


Telecommunications Focus: Income Opportunities

An October covered call on CTL at strike $28.00 using 300 shares is offering an income potential of $105. In November, a strike 28.00 covered call offers $270 and in January, a strike 28.00 covered call offers $345 in premium.

The annualized return by writing covered calls in October is 42.56%, in November is 31.38% and in January is 15.55%.

Chart for CTL

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 $165 in premium.

The annualized return by writing covered calls in November is 63.38% and in December is 48.33%.

Chart for S

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

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