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Income Trader
Reliable Income From Time-Tested Strategies

COI Income Trader Issue: May 8, 2023

Weekly Commentary

Not much has changed since last week, other than that we are seven days closer to the May 19, 2023, expiration cycle coming to a close. Thankfully, our three remaining May positions all remain in good standing.

We locked in profits in both PFE and KO and immediately sold more premium just over a week ago and I will most likely do the same in our May 19, 2023 positions this week which should bring our total return to around 75%.

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PriceDelta
Income Wheel Portfolio - Open Trades
3/29/2023PFE$40.15 $38.49 Covered CallJune 16, 2023 40 Call$0.63 $0.41 0.28
3/29/2023KO$61.75 $64.02 Short PutJune 16, 2023 62.5 Put$0.70 $0.65 0.62
4/4/2023GDX$34.20 $35.40 Short PutMay 19, 2023 32 Put$0.78 $0.10 0.08
4/4/2023WFC$36.61 $37.94 Covered CallMay 19, 2023 40 Call$0.55 $0.28 0.21
3/23/2023BITO$16.89 $17.19 Short PutMay 19, 2023 15 Put$1.10 $0.10 0.1
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%
1/20/20233/1/2023PFECovered Call March 3, 2023 46 Call$1.00 $0.02 $0.98 2.18%
2/22/20233/23/2023BITOShort PutMarch 31, 2023 31 Put$0.50 $0.05 $0.45 3.46%
2/22/20233/29/2023KOShort PutMarch 31, 2023 59 Put$0.86 $0.02 $0.84 1.42%
3/1/20233/29/2023PFECovered Call April 6, 2023 42 Call$0.65 $0.05 $0.60 1.43%
2/21/20233/31/2023GDXCovered Call March 31, 2023 29.5 Call$0.75 Called away at $29.5$1.84 6.48%
2/23/20233/31/2023WFCShort PutMarch 31, 2023 43 Put$0.53 Assigned at $43($4.87)-11.32%
3/29/20234/28/2023KOShort PutMay 19, 2023 60 Puts$0.76 $0.08 $0.68 1.13%
3/29/20234/28/2023PFECovered Call May 19, 2023 42.5 Call$0.53 $0.05 $0.48 1.23%
Income Trader Portfolio
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 ETFARKK41.22.661.1
Proshares Bitcoin ETFBITO46.74.355.5
iShares MSCI Emerging MarketsEEM16.37.661.1
iShares MSCI EAFEEFA16.113.164
iShares MSCI Mexico ETFEWW21.38.064.8
iShares MSCI BrazilEWZ31.58.066
iShares China Large-CapFXI28.39.158.4
Vaneck Gold MinersGDX37.821.967.6
SPDR Gold GLD17 .859.554.1
iShares High-YieldHYG11.619.949.1
SPDR Regional BankKRE62.699.037.9
iShares Silver TrustSLV31.738.261.7
iShares 20+ Treasury BondTLT18.513.046.8
United States Oil FundUSO37.913.139.6
Proshares Ultra VIX ShortUVXY111.548.442.7
Barclays S&P 500 VIX ETNVXX73.548.543.3
SPDR BiotechXLB20.113.548.8
SPDR Energy Select XLE28.911.137.2
SPDR FinancialsXLF23.830.047
SPDR UtilitiesXLU19.218.753.6
SPDR Retail XRT26.94.250.7

Stock Watchlist – Weekly Trade Ideas

Ticker Symbol IVIV Rank HPMR Oversold - Overbought
Bank of AmericaBAC37.553.838.1
Bristol-MyersBMY19.85.348.7
Citigroup C34.744.743.8
CostcoCOST23.811.654
Cisco SystemsCSCO28.83135.8
CVS HealthCVS26.216.938.6
Dow Inc.DOW28.544.253.2
Duke EnergyDUK23.014.159.2
FordF38.337.152.6
Gilead SciencesGILD26.92.733.2
General MotorsGM38.435.650.5
Intel INTC34.741.355.3
Johnson & JohnsonJNJ17.046.447.2
Coca-ColaKO14.255.260.3
Altria GroupMO19.854.752.2
Merck MRK19.953.465.7
Marvell Tech.MRVL53.417.264.1
Morgan StanleyMS30.155.339.2
MicronMU36.548.749.4
OracleORCL20.622.574.5
PfizerPFE21.513.432.2
PaypalPYPL4750.857
StarbucksSBUX21.727.843.8
AT&TT21.721.833.5
VerizonVZ20.429.846.8
Walgreens Boots AllianceWBA30.564.627.5
Wells Fargo WFC38.755.738.2
WalmartWMT23.656.761.7
Exxon-MobilXOM28.611.635.9

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

Covered Calls: PFE June 16, 2023 40 Call
Original trade published on 4-24-2023 (click here to see original alert)

Current Comments: We sold the June 16, 2023, 40 calls for $0.63. At the time of the alert, PFE was trading for 38.77.

Now, with PFE trading for 38.49, the probability of success stands at 73.80%, and the price of the 40 calls sits at $0.41. We are early in the trade, so with 40 days left until expiration, all there is to do now is allow time decay to work its magic.

COI_IT_050823_PFE.png

Selling Puts: BITO May 19, 2023, 15 Puts
Original trade published on 3-23-2023 (click here to see original alert)

Current Comments: We sold the May 19, 2023, 15 puts for $1.10. At the time of the alert, BITO was trading for 16.89.

Now, with BITO trading for 17.19, the probability of success stands at 87.96%, and the price of the 15 puts sits at $0.10. I intend on buying back our puts, locking in some decent profits and immediately selling more put premium early this week.

COI_IT_050823_BITO.png

Selling Puts: KO June 16, 2023, 62.5 Puts
Original trade published on 4-24-2023 (click here to see original alert)

Current Comments: We recently sold the June 16, 2023, 62.5 puts for $0.70. At the time of the alert, KO was trading for 63.80.

Now, with KO trading for 64.02, the probability of success stands at 68.49%, and the price of the 62.5 puts sits at $0.65. We are early in the trade so all there is to do is to remain patient and allow time decay to do its job of eating away at our premium.

COI_IT_050923_KO.png

Selling Puts: GDX May 19, 2023, 32 Puts
Original trade published on 4-4-2023 (click here to see original alert)

Current Comments: We sold the May 19, 2023, 32 puts for $0.78. At the time of the alert, GDX was trading for 34.20.

Now, with GDX trading for 35.40, the probability of success stands at 91.03%, and the price of the 32 puts sits at $0.10. I intend on buying back our puts, locking in some decent profits and immediately selling more put premium early this week.

COI_IT_050823_GDX.png

Covered Calls: WFC May 19, 2023, 40 Calls
Original trade published on 4-4-2023 (click here to see original alert)

Current Comments: We sold the May 19, 2023, 40 calls for $0.55. At the time of the alert, WFC was trading for 36.61.

Now, with WFC trading for 37.94, the probability of success stands at 80.69%, and the price of the 40 calls sits at $0.29. With 11 days left until expiration, all we can do now is wait and see where WFC closes on May 19. If it closes above our short call strike of 40 we reap the premium received for the 40 call plus capital gains…and then we begin the entire wheel process over again by selling puts the following week. If not, well, we simply keep our call premium and immediately sell more premium for income.

COI_IT_050823_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 May 15, 2023.