Weekly Commentary
The week I will add new trades in both BITO and KO.
We locked in some nice gains on both trades last week which brought our total premium return to 49.75%. My hope is that we are able to add several short-term trades to the mix, in addition to the new trades in BITO and KO.
Current Positions
| Open Date | Ticker | Stock Price (open) | Stock Price (current) | Strategy | Trade | Open Price | Current Price | Delta |
| Income Wheel Portfolio - Open Trades | ||||||||
| 1/5/2023 | WFC | $42.35 | $43.80 | Covered Call | February 17, 2023 45 Call | $0.84 | $0.84 | 0.41 |
| 1/9/2023 | GDX | $31.59 | $31.60 | Selling Puts | February 17, 2023 29 Puts | $0.54 | $0.26 | 0.13 |
| 1/20/2023 | PFE | $45.00 | $45.00 | Covered Call | March 3, 2023 46 Call | $1.00 | $1.00 | 0.4 |
| 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 | Covered Call | 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 | Short Put | December 16, 2022 45 Put | $1.08 | $0.02 | $1.06 | 2.36% |
| 11/17/2022 | 12/19/2022 | BITO | Covered Call | December 30, 2022 12 Call | $0.45 | $0.04 | $0.41 | 3.42% |
| 11/17/2022 | 12/30/2022 | WFC | Short Put | December 30, 2022 44 Put | $1.02 | Assigned at $44 | ($1.37) | -3.11% |
| 11/29/2023 | 1/9/2023 | GDX | Short Put | January 20, 2023 26 Put | $0.87 | $0.02 | $0.85 | 3.27% |
| 12/8/2022 | 1/13/2023 | PFE | Short Put | January 13, 2023 49 Put | $0.62 | Assigned at $49 | ($0.53) | -1.08% |
| 12/19/2022 | 1/20/2023 | BITO | Covered Call | January 20, 2023 11.5 Call | $0.30 | Called away at $11.5 | $1.49 | 14.70% |
| 11/29/2022 | 1/20/2023 | KO | Short Put | January 20, 2023 60 Put | $0.84 | $0.00 | $0.84 | 1.40% |
| 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 | 49.8 | 5.5 | 65.6 |
| Proshares Bitcoin ETF | BITO | 68.2 | 13 | 86.9 |
| iShares MSCI Emerging Markets | EEM | 19.1 | 3.8 | 77.7 |
| iShares MSCI EAFE | EFA | 18.3 | 6.2 | 79.1 |
| iShares MSCI Mexico ETF | EWW | 22.8 | 4.4 | 78 |
| iShares MSCI Brazil | EWZ | 38.0 | 30.7 | 55.3 |
| iShares China Large-Cap | FXI | 30.7 | 7.8 | 70.7 |
| Vaneck Gold Miners | GDX | 37.3 | 6.9 | 65 |
| SPDR Gold | GLD | 16.3 | 10.5 | 72.3 |
| iShares High-Yield | HYG | 10.8 | 5.8 | 60.1 |
| SPDR Regional Bank | KRE | 24.1 | 7.5 | 55 |
| iShares Silver Trust | SLV | 31.7 | 18.8 | 54.7 |
| iShares 20+ Treasury Bond | TLT | 20.9 | 26.5 | 52.1 |
| United States Oil Fund | USO | 37.7 | 0.6 | 69.9 |
| Proshares Ultra VIX Short | UVXY | 104.8 | 14.6 | 28.9 |
| Barclays S&P 500 VIX ETN | VXX | 69.4 | 12.5 | 29.6 |
| SPDR Biotech | XLB | 22.6 | 32 | 61 |
| SPDR Energy Select | XLE | 29.1 | 7.9 | 66.2 |
| SPDR Financials | XLF | 20.7 | 11 | 53 |
| SPDR Utilities | XLU | 20.0 | 14.8 | 34.2 |
| SPDR Retail | XRT | 31.2 | 1.2 | 60.6 |
Stock Watchlist – Weekly Trade Ideas
| Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought | |
| Bank of America | BAC | 28.1 | 12.8 | 48.9 |
| Bristol-Myers | BMY | 23.4 | 29.8 | 66.8 |
| Citigroup | C | 28.1 | 5.5 | 80.3 |
| Costco | COST | 24.1 | 3.1 | 55.3 |
| Cisco Systems | CSCO | 31.0 | 30.8 | 34.2 |
| CVS Health | CVS | 28.2 | 35.4 | 16.8 |
| Dow Inc. | DOW | 30.6 | 2.8 | 67.4 |
| Duke Energy | DUK | 23.8 | 29.3 | 30.1 |
| Ford | F | 49.4 | 28 | 47.5 |
| Gilead Sciences | GILD | 30.7 | 41.4 | 30.8 |
| General Motors | GM | 42.1 | 21.2 | 40.1 |
| Intel | INTC | 49.2 | 57.6 | 56.7 |
| Johnson & Johnson | JNJ | 21.5 | 32.8 | 16.8 |
| Coca-Cola | KO | 22.4 | 29.6 | 29.5 |
| Altria Group | MO | 23.6 | 15.8 | 43.4 |
| Merck | MRK | 23.9 | 27.1 | 43.1 |
| Marvell Tech. | MRVL | 51.6 | 11.6 | 55.5 |
| Morgan Stanley | MS | 26.9 | 2.5 | 72.5 |
| Micron | MU | 40.1 | 1.7 | 73.2 |
| Oracle | ORCL | 23.6 | 6.9 | 58.7 |
| Pfizer | PFE | 30.7 | 29.7 | 19.6 |
| Paypal | PYPL | 56.1 | 33.9 | 62.3 |
| Starbucks | SBUX | 32.3 | 24.9 | 53.5 |
| AT&T | T | 31.2 | 48.6 | 54.1 |
| Verizon | VZ | 30.1 | 53.6 | 41.1 |
| Walgreens Boots Alliance | WBA | 28.7 | 13.9 | 38.5 |
| Wells Fargo | WFC | 27.9 | 9.7 | 64 |
| Walmart | WMT | 22 | 19.3 | 36.8 |
| Exxon-Mobil | XOM | 30.4 | 7.6 | 63.7 |
Weekly Trade Discussion: Open Positions
Income Wheel Portfolio: Open Positions
Covered Call: WFC February 17, 2023, 45 Calls
Original trade published on 1-5-2023 (click here to see original alert)
Current Comments: On January 5 we sold the February 17, 2023, 45 calls for $0.84.
Now, with WFC trading for 43.92, the probability of success stands at 65.98%, and the price of the 45 calls sits at $0.64. We have 25 days left in the expiration cycle, so there isn’t much to do at the moment other than to allow the wheel strategy to work its magic.
Selling Puts: GDX February 17, 2023, 29 Puts
Original trade published on 1-9-2023 (click here to see original alert)
Current Comments: Two weeks ago, we sold the February 17, 2023, 29 puts for $0.54. At the time of the alert, GDX was trading for 31.59.
Now, with GDX trading for 32.42, the probability of success stands at 84.39%, and the price of the 29 puts sits at $0.22. If GDX continues to push higher and our premium manages to hit the $0.10 to $0.15 range, I will buy back our puts and immediately sell more puts in GDX.
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 February 17, 2023, 46 calls for $0.84. At the time of the alert, PFE was trading for 45.
Now, with PFE trading for 45.11, the probability of success stands at 60.82%, and the price of the 46 calls sits at $1.09. We are early in the expiration cycle, so there isn’t much to do at the moment, other than to allow the wheel strategy to work its magic.
The next Cabot Options Institute – Income Trader issue will be published on
January 30, 2023.