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.
Wells Fargo (WFC)
IV: 31.7%
IV Rank: 2.1
Expected Move (Range): The expected move (range) for the September 23, 2022, expiration cycle is from roughly 41 to 48.
With WFC trading for 44.48 I want to sell puts at the 41 put strike, just below the expected move, going out 44 days for roughly $0.61, if not higher. Of course, due to a wide variety of factors, prices may and most likely will vary slightly.
Here is the trade:
Buy to close WFC August 19, 2022, 39 puts for $0.03
Once that occurs (or if you are new to the trade):
Sell to open WFC September 23, 2022, 41 put strike for a total of $0.61 or higher. (As always, prices will vary, please adjust accordingly.)
Delta of short put: 0.21
Probability of Profit: 75.44%
Probability of Touch: 47.48%
Total net credit: $0.61
Max return (cash-secured): 1.5%
Risk Management
We use WFC as part of our Income Wheel Portfolio, so if WFC closes below our put strike at expiration we will be issued shares at the 41 strike and begin the process of selling calls against our newly acquired shares. Until that point, we will repeatedly sell puts on WFC. Of course, any necessary trade alerts/updates will follow.
Coca-Cola (KO)
IV: 21.7%
IV Rank: 25.1
Expected Move (Range): The expected move (range) for the September 23, 2022, expiration cycle is from roughly 60.5 to 66.
With KO trading for 63.15 I want to sell puts at the 60 put strike, just below the expected move, going out 44 days for roughly $0.62, if not higher. Of course, due to a wide variety of factors, prices may and most likely will vary slightly.
Here is the trade:
Buy to close KO August 19, 2022, 57.5 puts for $0.04
Once that occurs (or if you are new to the trade):
Sell to open KO September 23, 2022, 60 put for a total of $0.62 or higher. (As always, prices will vary, please adjust accordingly.)
Delta of short put: 0.23
Probability of Profit: 74.78%
Probability of Touch: 49.13%
Total net credit: $0.62
Max return (cash-secured): 1.0%
Risk Management
I use KO as part of our Income Wheel Portfolio, so if KO closes below our put strike at expiration we will be issued shares at the 60 strike and begin the process of selling calls against our newly acquired shares. Until that point, we will repeatedly sell puts on KO. Of course, any necessary trade alerts/updates will follow.