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Income Trader
Reliable Income From Time-Tested Strategies

Cabot Options Institute – Income Trader Issue: February 27, 2023

Weekly Commentary

We added four new positions last week, which brings us to five open trades. Our PFE position is due to expire this week and the four (KO, BITO, WFC, GDX) we added last week are due to expire on March 31, 2023.

Our PFE calls are essentially worthless, so I plan on buying them back today or tomorrow and immediately selling more calls against our shares. Otherwise there really isn’t much to do with our existing open positions as we are early in the trades.

I still intend on adding a jade lizard or two over the next week which will give us upwards of seven open positions. My focus remains on companies that have reported earnings over the past two weeks.

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PriceDelta
Income Wheel Portfolio - Open Trades
1/20/2023PFE$45.00 $41.75 Covered CallMarch 3, 2023 46 Call$1.00 $0.02 0.14
2/21/2023GDX$28.41 $26.99 Covered CallMarch 31, 2023 29.5 Call$0.75 $0.32 0.21
2/22/2023KO$60.00 $59.84 Short PutMarch 31, 2023 59 Put$0.86 $0.90 0.38
2/22/2023BITO$14.75 $14.42 Short PutMarch 31, 2023 13 Put$0.50 $0.43 0.48
2/23/2023WFC$45.75 $46.62 Short PutMarch 31, 2023 43 Put$0.53 $0.37 0.16
Open DateClose DateTickerStrategyTradeOpen Price Closed PriceProfitReturn
Income Wheel Portfolio - Closed Trades
6/3/20227/8/2022PFEShort PutJuly 8, 2022 50 Put$0.65 $0.00 $0.65 1.30%
6/10/20227/15/2022GDXShort PutJuly 15, 2022 29 Put$0.66 Assigned at $29($2.75)-9.48%
6/10/20227/15/2022BITOShort PutJuly 15, 2022 16 Put$0.82 Assigned at $16($2.09)-13.10%
6/22/20227/21/2022WFCShort PutJuly 29, 2022 35 Put$0.80 $0.02 $0.78 2.23%
6/30/20228/10/2022KOShort PutAugust 19, 2022 57.5 Put$0.70 $0.03 $0.67 1.20%
7/21/20228/10/2022WFCShort PutAugust 19, 2022 39 Put$0.46 $0.04 $0.42 1.08%
7/18/20228/17/2022BITOCovered Call August 19, 2022 16 Call$0.50 $0.03 $0.47 3.59%
7/18/20228/17/2022GDXCovered Call August 19, 2022 28 Call$0.63 $0.05 $0.57 2.22%
7/11/20228/23/2022PFEShort PutAugust 19, 2022 50 Put$1.00 Assigned at $50$0.21 0.43%
8/17/20229/7/2022BITOCovered Call September 23, 2022 16.5 Call$0.55 $0.03 $0.52 4.00%
8/17/20229/7/2022GDXCovered Call September 23, 2022 28 Call$0.59 $0.07 $0.52 2.03%
8/23/20229/23/2022PFECovered Call October 21, 2022 50 Call $1.50 $0.09 $1.41 2.82%
8/10/20229/23/2022KOShort PutSeptember 23, 2022 60 Put$0.62 Assigned at $60($0.78)-1.30%
8/10/20229/23/2022WFCShort PutSeptember 23, 2022 41 Put$0.61 Assigned at $41$0.02 0.05%
9/7/202210/17/2022BITOCovered Call October 21, 2022 14 Call$0.40 $0.03 $0.37 2.60%
9/7/202210/17/2022GDXCovered Call October 21, 2022 26 Call$0.70 $0.04 $0.66 2.50%
9/26/202210/21/2022WFCCovered Call October 21, 2022 41 Call$1.30 Called away at $41$1.89 4.67%
9/26/202210/21/2022KOCovered Call October 21, 2022 60 Call$0.70 $0.00 $0.70 1.20%
9/23/20221028/2022PFECovered Call October 28, 2022 47 Call$0.56 Called away at $47$3.49 7.43%
10/17/202211/17/2022BITOCovered Call November 25, 2022 13.5 Call$0.38 $0.03 $0.35 2.60%
10/25/202211/17/2022WFCShort PutNovember 25, 2022 43 Put$0.96 $0.07 $0.89 2.00%
10/17/202211/25/2022GDXCovered Call November 25, 2022 26 Call$0.58 Called away at $26$1.09 3.87%
10/25/202211/25/2022KOCovered Call November 25, 2022 60 Call$0.80 Called away at $60$2.20 3.75%
11/3/202212/8/2022PFEShort PutDecember 16, 2022 45 Put$1.08 $0.02 $1.06 2.36%
11/17/202212/19/2022BITOCovered Call December 30, 2022 12 Call$0.45 $0.04 $0.41 3.42%
11/17/202212/30/2022WFCShort PutDecember 30, 2022 44 Put$1.02 Assigned at $44($1.37)-3.11%
11/29/20231/9/2023GDXShort PutJanuary 20, 2023 26 Put$0.87 $0.02 $0.85 3.27%
12/8/20221/13/2023PFEShort PutJanuary 13, 2023 49 Put$0.62 Assigned at $49($0.53)-1.08%
12/19/20221/20/2023BITOCovered Call January 20, 2023 11.5 Call$0.30 Called away at $11.5$1.49 14.70%
11/29/20221/20/2023KOShort PutJanuary 20, 2023 60 Put$0.84 $0.00 $0.84 1.40%
1/5/20232/17/2023WFCCovered Call February 17, 2023 45 Call$0.84 Called away at $45$4.23 10.17%
1/9/20232/17/2023GDXShort PutFebruary 17, 2023 29 Put$0.54 Assigned at $29($0.05)-0.10%
1/23/20232/17/2023KOShort PutFebruary 17, 2023 59 Put$0.62 $0.00 $0.62 1.05%
1/23/20232/17/2023BITOShort PutFebruary 17, 2023 13.5 Put$0.52 $0.00 $0.52 3.85%
Income Trader Portfolio (Short-Term Trades 30 to 60 days)
7/26/20228/17/2022JPMShort PutSeptember 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 Overboughtgreater than or equal to 80.1
Overbought60.1 to 80.0
Neutral40.1 to 60
Oversold20.1 to 40.0
Very Oversoldless 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 IVIV Rank HPMR Oversold - Overbought
ARK Innovation ETFARKK59.6337.3
Proshares Bitcoin ETFBITO59.13.744.5
iShares MSCI Emerging MarketsEEM21.34.717.6
iShares MSCI EAFEEFA18.16.326.6
iShares MSCI Mexico ETFEWW23.411.933.8
iShares MSCI BrazilEWZ34.718.346.6
iShares China Large-CapFXI34.610.315.6
Vaneck Gold MinersGDX34.60.610.3
SPDR Gold GLD14.60.117.7
iShares High-YieldHYG12.714.140.9
SPDR Regional BankKRE26.09.838.7
iShares Silver TrustSLV28.32.215.1
iShares 20+ Treasury BondTLT19.62.635.2
United States Oil FundUSO37.311.647.3
Proshares Ultra VIX ShortUVXY111.622.556.8
Barclays S&P 500 VIX ETNVXX77.114.457.8
SPDR BiotechXLB21.716.943.7
SPDR Energy Select XLE30.915.936.9
SPDR FinancialsXLF21.87.130.6
SPDR UtilitiesXLU20.49.834.5
SPDR Retail XRT34.714.930.8

Stock Watchlist – Weekly Trade Ideas

Ticker Symbol IVIV Rank HPMR Oversold - Overbought
Bank of AmericaBAC27.57.620.9
Bristol-MyersBMY21.99.330.4
Citigroup C29.36.940.3
CostcoCOST29.416.930.2
Cisco SystemsCSCO24.810.445
CVS HealthCVS21.31.229.2
Dow Inc.DOW29.50.142.3
Duke EnergyDUK21.51231.3
FordF42.15.322.8
Gilead SciencesGILD29.21025.7
General MotorsGM37.59.729.2
Intel INTC38.72221.1
Johnson & JohnsonJNJ18.922.622.5
Coca-ColaKO17.51.346.9
Altria GroupMO23.314.250.2
Merck MRK22.711.160.1
Marvell Tech.MRVL61.53445.7
Morgan StanleyMS26.6742.7
MicronMU44.119.941.1
OracleORCL33.726.658.3
PfizerPFE24.63.319.6
PaypalPYPL42.3627.7
StarbucksSBUX27.38.822.1
AT&TT23.812.544.4
VerizonVZ23.326.729.3
Walgreens Boots AllianceWBA28.423.937.5
Wells Fargo WFC275.445.1
WalmartWMT20.810.441.9
Exxon-MobilXOM29.5536.7

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

Covered Calls: PFE March 3, 2023, 46 Calls
Original trade published on 1-20-2023 (click here to see original alert)

Current Comments: Last week we sold the March 3, 2023, 46 calls for $0.84. At the time of the alert, PFE was trading for 45.

Now, with PFE trading for 41.75, the probability of success stands at 98.61%, and the price of the 46 calls sits at $0.02. I plan on buying back our March 3, 2023, 46 calls early this week, locking in a nice profit and immediately selling more premium.

COI_IT_022423_PFE.png

Covered Calls: GDX March 31, 2023, 29.5 Calls
Original trade published on 2-21-2023 (click here to see original alert)

Current Comments: Last week we sold the March 31, 2023, 29.5 calls for $0.75. At the time of the alert, GDX was trading for 28.17.

Now, with GDX trading for 26.99, the probability of success stands at 81.62%, and the price of the 29.5 calls sits at $0.30. If our GDX calls hit $0.15 in the coming week or two, I plan on buying back our March 31, 2023, 29.5 calls, and immediately selling more calls for income.

COI_IT_022423_GDX.png

Selling Puts: BITO March 31, 2023, 13 Puts
Original trade published on 2-22-2023 (click here to see original alert)

Current Comments: Last week we sold the March 31, 2023, 13 puts for $0.50. At the time of the alert, BITO was trading for 14.75.

Now, with BITO trading for 14.42, the probability of success stands at 69.15%, and the price of the 13 puts sits at $0.43. If our BITO puts hit $0.10 over the coming week or two, I plan on buying back our March 31, 2023, 13 puts and immediately selling more puts for income.

COI_IT_022423_BITO.png

Selling Puts: KO March 31, 2023, 59 Puts
Original trade published on 2-22-2023 (click here to see original alert)

Current Comments: Last week we sold the March 31, 2023, 59 puts for $0.86. At the time of the alert, KO was trading for 60.

Now, with KO trading for 59.84, the probability of success stands at 58.97%, and the price of the 59 puts sits at $0.89.

COI_IT_022423_KO.png

Selling Puts: WFC March 31, 2023, 43 Puts
Original trade published on 2-23-2023 (click here to see original alert)

Current Comments: Last week we sold the March 31, 2023, 43 puts for $0.53. At the time of the alert, WFC was trading for 45.75.

Now, with WFC trading for 46.62, the probability of success stands at 81.50%, and the price of the 43 puts sits at $0.37.

COI_IT_022423_WFC.png

As always, if you have any questions please do not hesitate to email me at andy@cabotwealth.com.


The next Cabot Options Institute – Income Trader issue will be published on

March 6, 2023.