As we head into the holiday season, there really isn’t much to do with our existing positions. I do plan on buying back our BITO calls this week and selling more calls against our shares, but other than that I don’t have any plans, at least at the moment, to place any trades in our Income Wheel portfolio. That being said, after the sell-off last week there are several good candidates for our shorter-term Income Trades portfolio. If all goes as planned, we could have at least one, if not two trades for our one-off, short-term (30 to 60 days) Income Trades portfolio.
Current Positions
| Open Date | Ticker | Stock Price (open) | Stock Price (current) | Strategy | Trade | Open Price | Current Price | Delta | |
| Income Wheel Portfolio - Open Trades | |||||||||
| 11/17/2022 | BITO | $10.14 | $10.50 | Covered Call | December 30, 2022 12 Call | $0.45 | $0.07 | 0.88 | |
| 11/17/2022 | WFC | $46.02 | $41.19 | Selling Puts | December 30, 2022 44 Put | $1.02 | $2.85 | 0.93 | |
| 12/8/2022 | PFE | $51.60 | $51.40 | Selling Puts | January 13, 2023 49 Put | $0.62 | $0.52 | 0.23 | |
| 11/29/2022 | GDX | $28.03 | $28.60 | Selling Puts | January 20, 2023 26 Put | $0.87 | $0.48 | 0.21 | |
| 11/29/2022 | KO | $62.23 | $62.75 | Selling Puts | January 20, 2023 60 Put | $0.84 | $0.42 | 0.2 | |
| Income Trades Portfolio - Open Trades | |||||||||
| Open Date | Close Date | Ticker | Strategy | Trade | Open Price | Closed Price | Profit | Return | |
| Income Wheel Portfolio - Closed Trades | |||||||||
| 6/3/2022 | 7/8/2022 | PFE | Short Put | July 8, 2022 50 Put | $0.65 | $0.00 | $0.65 | 1.30% | |
| 6/10/2022 | 7/15/2022 | GDX | Short Put | July 15, 2022 29 Put | $0.66 | Assigned at $29 | ($2.75) | -9.48% | |
| 6/10/2022 | 7/15/2022 | BITO | Short Put | July 15, 2022 16 Put | $0.82 | Assigned at $16 | ($2.09) | -13.10% | |
| 6/22/2022 | 7/21/2022 | WFC | Short Put | July 29, 2022 35 Put | $0.80 | $0.02 | $0.78 | 2.23% | |
| 6/30/2022 | 8/10/2022 | KO | Short Put | August 19, 2022 57.5 Put | $0.70 | $0.03 | $0.67 | 1.20% | |
| 7/21/2022 | 8/10/2022 | WFC | Short Put | August 19, 2022 39 Put | $0.46 | $0.04 | $0.42 | 1.08% | |
| 7/18/2022 | 8/17/2022 | BITO | Covered Call | August 19, 2022 16 Call | $0.50 | $0.03 | $0.47 | 3.59% | |
| 7/18/2022 | 8/17/2022 | GDX | Covered Call | August 19, 2022 28 Call | $0.63 | $0.05 | $0.57 | 2.22% | |
| 7/11/2022 | 8/23/2022 | PFE | Short Put | August 19, 2022 50 Put | $1.00 | Assigned at $50 | $0.21 | 0.43% | |
| 8/17/2022 | 9/7/2022 | BITO | Covered Call | September 23, 2022 16.5 Call | $0.55 | $0.03 | $0.52 | 4.00% | |
| 8/17/2022 | 9/7/2022 | GDX | Covered Call | September 23, 2022 28 Call | $0.59 | $0.07 | $0.52 | 2.03% | |
| 8/23/2022 | 9/23/2022 | PFE | Covered Call | October 21, 2022 50 Call | $1.50 | $0.09 | $1.41 | 2.82% | |
| 8/10/2022 | 9/23/2022 | KO | Short Put | September 23, 2022 60 Put | $0.62 | Assigned at $60 | ($0.78) | -1.30% | |
| 8/10/2022 | 9/23/2022 | WFC | Short Put | September 23, 2022 41 Put | $0.61 | Assigned at $41 | $0.02 | 0.05% | |
| 9/7/2022 | 10/17/2022 | BITO | Short Put | October 21, 2022 14 Call | $0.40 | $0.03 | $0.37 | 2.60% | |
| 9/7/2022 | 10/17/2022 | GDX | Covered Call | October 21, 2022 26 Call | $0.70 | $0.04 | $0.66 | 2.50% | |
| 9/26/2022 | 10/21/2022 | WFC | Covered Call | October 21, 2022 41 Call | $1.30 | Called away at $41 | $1.89 | 4.67% | |
| 9/26/2022 | 10/21/2022 | KO | Covered Call | October 21, 2022 60 Call | $0.70 | $0.00 | $0.70 | 1.20% | |
| 9/23/2022 | 1028/2022 | PFE | Covered Call | October 28, 2022 47 Call | $0.56 | Called away at $47 | $3.49 | 7.43% | |
| 10/17/2022 | 11/17/2022 | BITO | Covered Call | November 25, 2022 13.5 Call | $0.38 | $0.03 | $0.35 | 2.60% | |
| 10/25/2022 | 11/17/2022 | WFC | Short Put | November 25, 2022 43 Put | $0.96 | $0.07 | $0.89 | 2.00% | |
| 10/17/2022 | 11/25/2022 | GDX | Covered Call | November 25, 2022 26 Call | $0.58 | Called away at $26 | $1.09 | 3.87% | |
| 10/25/2022 | 11/25/2022 | KO | Covered Call | November 25, 2022 60 Call | $0.80 | Called away at $60 | $2.20 | 3.75% | |
| 11/3/2022 | 12/8/2022 | PFE | Selling Puts | December 16, 2022 45 Put | $1.08 | $0.02 | $1.06 | 2.36% | |
| 30.05% | |||||||||
| Income Trades Portfolio - Closed Trades | |||||||||
| 7/26/2022 | 8/17/2022 | JPM | Short Put | September 16, 2022 100 Put | $1.22 | $0.16 | $1.06 | 1.10% | |
Weekly High-Probability Mean Reversion Indicator
Here are the various levels I use to determine if an ETF is in an oversold or overbought state.
| Very Overbought | greater than or equal to 80.1 |
| Overbought | 60.1 to 80.0 |
| Neutral | 40.1 to 60 |
| Oversold | 20.1 to 40.0 |
| Very Oversold | less than or equal to 20.0 |
Each week I also include the current implied volatility (IV) and IV Rank. I look for an IV rank above 40, preferably higher.
ETF Watchlist – Weekly Trade Ideas
| Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought | |
| ARK Innovation ETF | ARKK | 56.6 | 28.3 | 31 |
| Proshares Bitcoin ETF | BITO | 75.0 | 16.2 | 42.7 |
| iShares MSCI Emerging Markets | EEM | 21.4 | 9.6 | 34.1 |
| iShares MSCI EAFE | EFA | 19.8 | 19.1 | 34.2 |
| iShares MSCI Mexico ETF | EWW | 23.6 | 11.7 | 25.1 |
| iShares MSCI Brazil | EWZ | 41.3 | 39.9 | 15.1 |
| iShares China Large-Cap | FXI | 37.3 | 29.5 | 49.3 |
| Vaneck Gold Miners | GDX | 38.4 | 36.5 | 45.5 |
| SPDR Gold | GLD | 14.6 | 1.5 | 54.5 |
| iShares High-Yield | HYG | 12.3 | 25.5 | 40.7 |
| SPDR Regional Bank | KRE | 26.7 | 10.7 | 16.3 |
| iShares Silver Trust | SLV | 32.5 | 29 | 57.1 |
| iShares 20+ Treasury Bond | TLT | 21.5 | 35.8 | 54.7 |
| United States Oil Fund | USO | 42.8 | 22.7 | 41.5 |
| Proshares Ultra VIX Short | UVXY | 93.0 | 6.6 | 49 |
| Barclays S&P 500 VIX ETN | VXX | 62.1 | 6.8 | 49.5 |
| SPDR Biotech | XLB | 24.7 | 38.6 | 33.5 |
| SPDR Energy Select | XLE | 34.0 | 32.7 | 35.3 |
| SPDR Financials | XLF | 24.6 | 15.2 | 25 |
| SPDR Utilities | XLU | 21.4 | 31.6 | 41.6 |
| SPDR Retail | XRT | 35.1 | 19.1 | 22.3 |
Stock Watchlist – Weekly Trade Ideas
| Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought | |
| Bank of America | BAC | 35.7 | 30.2 | 16.2 |
| Bristol-Myers | BMY | 22.9 | 36.4 | 10.8 |
| Citigroup | C | 36.7 | 28.1 | 32.3 |
| Costco | COST | 27.9 | 17.5 | 17.7 |
| Cisco Systems | CSCO | 26.0 | 17.3 | 39.3 |
| CVS Health | CVS | 25.4 | 27.1 | 24.7 |
| Dow Inc. | DOW | 32.3 | 22.8 | 38.4 |
| Duke Energy | DUK | 21.1 | 19.7 | 46.5 |
| Ford | F | 43.5 | 18.3 | 18.4 |
| Gilead Sciences | GILD | 26.2 | 27.1 | 43.8 |
| General Motors | GM | 40.0 | 16.9 | 20.5 |
| Intel | INTC | 38.7 | 27.2 | 23.3 |
| Johnson & Johnson | JNJ | 18.6 | 17.7 | 40 |
| Coca-Cola | KO | 19.0 | 17.1 | 40 |
| Altria Group | MO | 22.5 | 14 | 49.8 |
| Merck | MRK | 22.3 | 24.3 | 49.7 |
| Marvell Tech. | MRVL | 57.5 | 42.1 | 31.5 |
| Morgan Stanley | MS | 32.4 | 23.4 | 35.7 |
| Micron | MU | 49.6 | 32.4 | 27.1 |
| Oracle | ORCL | 28 | 20 | 43.2 |
| Pfizer | PFE | 27.8 | 20 | 47.7 |
| Paypal | PYPL | 47.5 | 18.5 | 17.9 |
| Starbucks | SBUX | 29.7 | 13.2 | 34.8 |
| AT&T | T | 25.1 | 16 | 31.9 |
| Verizon | VZ | 26.3 | 36.9 | 38.8 |
| Walgreens Boots Alliance | WBA | 35.7 | 42.4 | 26.7 |
| Wells Fargo | WFC | 35.6 | 25.8 | 16.3 |
| Walmart | WMT | 20.5 | 14.4 | 23.9 |
| Exxon-Mobil | XOM | 32.0 | 20.6 | 36.7 |
Weekly Trade Discussion: Open Positions
Income Wheel Portfolio: Open Positions
Covered Call: BITO December 30, 2022, 12 Calls
Original trade published on 11-17-2022 (click here to see original alert)
Current Comments: We’ve managed to sell and lock in a total of $2.63 worth of premium, or 13.6%, over four trades since introducing this position to the Income Wheel Portfolio. We were assigned the stock for $16 back on July 15, 2022, so most of our premium has come during the covered call phase of our strategy. Our current break-even stands at 12.99.
Lastly, with BITO trading for 10.66, our December 30, 2022, 12 calls that we sold for $0.45 on November 17 are currently worth $0.07. Since we have little to no premium left in our short calls, I will be buying back the 12 calls this week and immediately selling more premium.
Selling Puts: WFC December 30, 2022, 44 Puts
Original trade published on 11-17-2022 (click here to see original alert)
Current Comments: We’ve locked in $5.09 worth of premium since introducing WFC to the portfolio back in late June. Our break-even point, or cost basis on the position, is 35.91.
Roughly one month ago, with WFC trading for 46.09, we sold puts again, this time at the 44 strike. Now, with WFC trading at 41.19, the probability of success stands at 12.82%, and the price of our 44 puts stands at $2.85. If WFC closes below our 44 put strike, no worries, per our Income Wheel guidelines we will simply be issued shares in WFC (100 shares per put contract sold) and immediately sell calls against our newly acquired shares.
Selling Puts: PFE January 13, 2023, 49 Puts
Original trade published on 12-8-2022 (click here to see original alert)
Current Comments: We’ve managed to lock in $4.68, or 8.60% worth of premium, since introducing PFE to the portfolio. Our break-even currently stands at 46.38.
Two weeks ago, with PFE trading for 51.60 we sold the 49 puts for $0.62. At the time, the probability of the 49 puts closing out of the money was 72.94%.
Now, with PFE trading at 51.40, the probability of success stands at 74.59%, and the price of our 49 puts stands at $0.52. As it stands, we are in good shape.
Selling Puts: GDX January 20, 2023, 26 Puts
Original trade published on 11-29-2022 (click here to see original alert)
Current Comments: A few weeks ago we sold the January 20, 2023 26 puts for $0.87.
Now, with GDX trading for 28.12, the probability of success stands at 74.02%, and the price of the 26 puts sits at $0.48. We are early in the expiration cycle, so there isn’t much to do at the moment, other than to allow time decay to work its magic.
Selling Puts: KO January 20, 2023, 60 Puts
Original trade published on 11-29-2022 (click here to see original alert)
Current Comments: A few weeks ago we sold the January 20, 2023 60 puts for $0.84.
Now, with KO trading for 62.75, the probability of success stands at 78.38%, and the price of the 60 puts sits at $0.42. Like our GDX puts, we are early in the expiration cycle, so there isn’t much to do at the moment.
The next Cabot Options Institute – Income Trader issue will be published on
December 27, 2022.