Please ensure Javascript is enabled for purposes of website accessibility
Income Trader
Reliable Income From Time-Tested Strategies

April 4, 2023

Cabot Options Institute Income Trader – Alert (GDX, WFC)

VanEck Gold Miners (GDX)

It’s time to start selling puts again in GDX. We’ve managed to bring in 10.8% worth of premium since introducing GDX to the Income Wheel Portfolio.

GDX is currently trading for 34.20.

Here is the trade:

Sell to Open GDX May 19, 2023, 32 puts for $0.78. (As always, prices will vary, please adjust accordingly.)

COI_IT_040423_GDX_open.png

Delta of short call: 0.27
Probability of Profit: 68.44%
Probability of Touch: 61.80%
Total net credit: $0.78
Max return (cash-secured): 2.4%

Risk Management

We use GDX as part of our Income Wheel Portfolio, so if GDX closes below our put strike at expiration we will be assigned shares of GDX (per the guidelines of the strategy). Until that point, we will repeatedly sell puts on GDX. Of course, any necessary trade alerts/updates will follow.

Wells Fargo (WFC)

As part of the Income Wheel approach, we allowed our Wells Fargo (WFC) puts to expire in the money at expiration last week. As a result, we were issued shares at our chosen put strike of 43.

Today, as our Income Wheel strategy states, we are going to sell calls against our newly issued shares in WFC.

We are not selling naked calls, so you need to have at least 100 shares if you wish to enter a new position in WFC. For those of you that are new to Income Trader and wish to follow along with WFC, buying at least 100 shares of WFC for every call contract you wish to sell is required as we are in the covered call phase of the Income Wheel strategy for WFC.

WFC is currently trading for 36.61.

Here is the trade:

Sell to Open WFC May 19, 2023, 40 (covered) call for $0.55 (adjust accordingly, prices may vary from time of alert).

COI_IT_040423_WFC_open.png

Probability of Profit: 79.40%
Probability of Touch: 42.18%
Total net credit: $0.55
Max return (call premium): 1.5%

As always, if you have any questions, please feel free to email me at andy@cabotwealth.com.


Andy Crowder is a professional options trader, researcher and Chief Analyst of Cabot Options Institute. Formerly with Oppenheimer & Co. in New York, Andy has leveraged his investment experience to develop his statistically based options trading strategy which applies probability theory to option valuations in order to execute risk-controlled trades. This proprietary strategy has been refined through two decades of research and real-world experience and has been featured in the Wall Street Journal, Seeking Alpha, and numerous other financial publications. Andy has helped thousands of option traders learn and implement his meticulous rules-driven options trading strategies through highly attended conferences, one-on-one coaching, webinars, and his work as a financial columnist. He currently resides in Bolton Valley, Vermont and when he’s not trading, teaching and writing about options, he enjoys spending time with his wife and two daughters, backcountry skiing, biking, running and enjoying all things outdoors.