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Income Trader
Reliable Income From Time-Tested Strategies
Issues
We locked in a return of 3.9% in GDX and 3.8% in KO last week and, if all goes as planned, look to lock in even more in PFE this week. Moreover, I plan on continuing to wheel both GDX and KO, so expect to see trade alerts for both stocks as I intend on selling a few puts.

Lastly, if the market cooperates and pulls back a bit from its current short-term overbought state, I intend on adding a few short-term trades to the mix, mostly by selling puts, but we could see an appearance of a jade lizard. Stay tuned!
This week we have two positions due to expire: one in GDX, the other in KO.

Both positions are in the covered call phase of the income wheel strategy and both have calls that look to close in-the-money at the end of this week. If both close in-the-money, we will simply lock in our capital gains, premium and begin the wheel process over again by selling more puts in both positions early next week.

I also intend on adding a new short-term trade to the mix this week. Stay tuned!
We decided to stay on the sidelines last week given the market action, but intend to add several new positions for each of our portfolios this week. As I’ve stated in the past, I don’t plan on ramping up positions quickly; rather, I take a methodical approach to slowly adding a few new positions to the mix. As for our current positions, they remain in good shape. Other than BITO we’ve had a good stretch over the past few months and if all goes well BITO might even join the club, if we continue to allow it.

It was another good week for our positions. And now it’s time to finally add a few more positions to the mix. I plan on adding two new positions this week: one to the Income Wheel Portfolio, the other will be a short-term trade with roughly 45-60 days until expiration. There are several good opportunities from our weekly watch list that I’ll be sifting through with the intent to add something mid-week, after the elections have passed.
This week I intend on adding several new positions to the mix. My hope is to add two new positions to the “Wheel” portfolio and two short-term, one-off trades.


Also, with PFE closing in the money, or above our 47 calls at expiration, we will need to sell some puts early in the week to start a new phase of the wheeling process. Our shares were called away at $47. We’ve managed to lock in $3.62, or 7.24% worth of premium since introducing PFE to the portfolio. Our breakeven currently stands at 46.38.
It’s going to be a short report this week with our monthly call last week and the October expiration cycle finally behind us. We covered a ton of information in our call so please, if you have the chance, take a listen when it’s convenient for you.

We locked in a few more profits last week and will be doing the same this week, this time in PFE.
It’s going to be a fairly busy week for trading.

We have four positions that are due to expire at the October 21, 2022 expiration cycle, three of which have little to no premium. As a result, I intend to buy back our calls in GDX, BITO, and KO on Monday or Tuesday. I’ll plan on doing the same in our PFE calls that are due to expire October 28.

My hope is to add several more positions to the Income Wheel portfolio this week as opportunities are plentiful.
It’s going to be a fairly busy week for trading.

We have four positions that are due to expire at the October 21, 2022 expiration cycle, three of which have little to no premium. As a result, I intend to buy back our calls in GDX, BITO, and KO on Monday or Tuesday. I’ll plan on doing the same in our PFE calls that are due to expire October 28.

My hope is to add several more positions to the Income Wheel portfolio this week as opportunities are plentiful.
The continuation of the market sell-off led to another slow trading week as I decided it was best to simply sit on our hands.

As I stated in my Quant Trader advisory today, the investor’s fear gauge, otherwise known as the VIX, hit strong overhead resistance last week while simultaneously hitting a short-term overbought state. Typically, this type of situation leads to a reversion to the mean, especially in the few, reliable volatility products like the VIX.



The VIX hit 35 before pulling back the latter part of the week, even as the S&P 500 continued to plummet, another sign that sellers have exhausted themselves over the short-term. Which is why this week is pivotal for not only the VIX, but the market overall.

We were assigned shares of WFC and KO. As a result, per our income cycle guidelines, we will begin the process of selling calls on both stocks shortly after the opening bell Monday.

Moreover, I plan on adding a new short-term position to the mix early next week. This will not be part of our income cycle portfolio; rather, it’s a short-term play to take advantage of the near-term pop in implied volatility that resides across the board.



Stay tuned for an alert or two over the coming days!

Not much has changed with our trades since last week’s issue. As a result, I’m simply going to reiterate what I stated last week.

The portfolio continues to perform well in what has been a very difficult market for most traders and their respective portfolios. While I would love to have more trades on, I’m perfectly fine keeping our level at five open trades per expiration cycle with the understanding that as opportunities arise, I will add more. But with a widely vacillating market and a host of bearish crosscurrents I plan on maintaining a fairly conservative approach.

The portfolio continues to do well in what has been a very difficult market for most traders and their respective portfolios. While I would love to have more trades on, I’m perfectly fine keeping our level at five open trades per expiration cycle with the understanding that as opportunities arise, I will add more. But with a widely vacillating market and a host of bearish crosscurrents I plan on maintaining a fairly conservative approach. That being said, I also plan to add a hedging position to the mix for those that want a little portfolio insurance just in case the market pushes sharply lower. This will also allow us to add a few shorter-term trades to the mix.
Updates
Cabot Options Institute Income Trader is focused exclusively on the creating consistent income through a variety of options selling strategies. Whether you have questions about selling puts, covered strangles, jade lizards or our income wheel approach, Andy is more than happy to help you steepen your learning curve in this live event.
Cabot Options Institute Income Trader is focused exclusively on the creating consistent income through a variety of options selling strategies. Whether you have questions about selling puts, covered strangles, jade lizards or our income wheel approach, Andy is more than happy to help you steepen your learning curve in this live event.
Alerts
As part of the Income Wheel approach, we allowed our GDX calls to expire in the money at expiration last week. As a result, our shares were “called” away at the price of 26, and we locked in 3.87% on the trade.
Our BITO 13.5 calls for the November 25, 2022, expiration cycle are essentially worthless. As a result, I want to buy back our BITO calls, lock in our premium and immediately sell more premium.
In today’s trade alert I want to start out by selling puts in PFE with the intent of eventually wheeling into the position. Here is a quick review of the wheeling process.
As part of the Income Wheel approach, we allowed our Coca-Cola (KO) calls to expire out of the money at expiration last week. As a result, our calls expired worthless and we reaped the entire premium.
Our BITO 14 calls for the October 21, 2022, expiration cycle are essentially worthless. Same goes for our GDX 26 calls.
As part of the Income Wheel approach, we allowed our Coca-Cola (KO) puts to expire in-the-money at expiration last week. As a result, we were issued shares at our chosen put strike of 60.
Before I get to our PFE trade, I wanted to let everyone know that, per our income cycle guidelines, we will allow our KO puts and WFC puts to expire today (unless we see a rally today). This means that on Monday we will be put shares of both stocks and begin the process of selling calls on both.
Our BITO 16.5 calls for the September 23, 2022, expiration cycle are essentially worthless. Same goes for our GDX 28 calls.
As part of the Income Wheel approach, we allowed our Pfizer (PFE) puts to expire in-the-money at expiration last week. As a result, we were issued shares at our chosen put strike of 49.
As I discussed in our issue last week, with 30 days left in the September 16, 2022, expiration cycle, it just doesn’t make sense to hold on to our JPM puts any longer.
Our BITO 16 calls for the August 19, 2022, expiration cycle are essentially worthless. Same goes for our GDX 28 calls.
Our WFC 39 puts for the August 19, 2022, expiration cycle are essentially worthless. Same goes for our KO 57.5 puts. As a result, I want to buy back both our WFC and KO puts, lock in a decent profit and immediately sell more premium in both.
Portfolios
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
Strategy