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Income Trader
Reliable Income From Time-Tested Strategies

Cabot Options Institute – Income Trader Issue: November 28, 2022

We locked in a return of 3.9% in GDX and 3.8% in KO last week and, if all goes as planned, look to lock in even more in PFE this week. Moreover, I plan on continuing to wheel both GDX and KO, so expect to see trade alerts for both stocks as I intend on selling a few puts.

Lastly, if the market cooperates and pulls back a bit from its current short-term overbought state, I intend on adding a few short-term trades to the mix, mostly by selling puts, but we could see an appearance of a jade lizard. Stay tuned!

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PriceDelta
Income Wheel Portfolio - Open Trades
11/17/2022BITO$10.14 $10.19 Covered CallDecember 30, 2022 12 Call$0.45 $0.26 0.76
11/17/2022WFC$46.02 $49.21 Selling PutsDecember 30, 2022 44 Put$1.02 $0.19 0.09
11/3/2022PFE$46.44 $47.44 Selling PutsDecember 16, 2022 45 Put$1.08 $0.39 0.21
Income Trades Portfolio - Open Trades
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%
9/7/202210/17/2022BITOShort PutOctober 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%
Income Trades Portfolio - Closed Trades
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 ETFARKK56.923.345.2
Proshares Bitcoin ETFBITO86.920.745.1
iShares MSCI Emerging MarketsEEM23.222.457.1
iShares MSCI EAFEEFA19.628.578.1
iShares MSCI Mexico ETFEWW24.939.268.3
iShares MSCI BrazilEWZ53.257.938.3
iShares China Large-CapFXI41.83850.5
Vaneck Gold MinersGDX41.530.266.6
SPDR Gold GLD14.8061.6
iShares High-YieldHYG12.724.166.1
SPDR Regional BankKRE25.80.260.3
iShares Silver TrustSLV31.422.560.3
iShares 20+ Treasury BondTLT24.743.372.7
United States Oil FundUSO49.830.228.8
Proshares Ultra VIX ShortUVXY96.23.417.6
Barclays S&P 500 VIX ETNVXX66.8717.8
SPDR BiotechXLB23.132.775.7
SPDR Energy Select XLE35.732.651.5
SPDR FinancialsXLF22.33.373.7
SPDR UtilitiesXLU22.030.873.5
SPDR Retail XRT36.220.366.5

Stock Watchlist – Weekly Trade Ideas

Ticker Symbol IVIV Rank HPMR Oversold - Overbought
Bank of AmericaBAC27.90.764.7
Citigroup C28.90.753.3
Cisco SystemsCSCO23.311.875
CVS HealthCVS21.36.570.3
Dow Inc.DOW31.023.463.7
Duke EnergyDUK23.52672.7
Gilead SciencesGILD25.520.189.6
General MotorsGM39.16.963.1
Intel INTC35.832.449.9
Johnson & JohnsonJNJ16.41.270.3
Altria GroupMO24952
Merck MRK21.516.480.3
Marvell Tech.MRVL65.156.853.6
Morgan StanleyMS27.41072.5
Walgreens Boots AllianceWBA27.926.771.9
Wells Fargo WFC272.662.9

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 breakeven stands at 12.99.

Lastly, with BITO trading for 10.19, our December 30, 2022, 12 calls that we sold for $0.45 on 11/17 are currently worth $0.26. So far, so good.


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 breakeven point, or cost basis on the position, is 35.91.

Last week, with WFC trading for 46.02, we sold puts again, this time at the 44 strike. Now, with WFC trading higher at 47.44, the probability of success stands at 78.59%, and the price of our 44 puts stands at $0.43. As it stands, our position is in great shape.


Selling Puts: PFE December 16, 2022, 45 Puts
Original trade published on 11-3-2022 (click here to see original alert)

Current Comments: We’ve managed to lock in $3.62, or 7.24% worth of premium, since introducing PFE to the portfolio. Our breakeven currently stands at 46.38.

Several weeks ago, with PFE trading for 46.44 we started the wheel process over again by selling the 45 puts for $1.08. At the time, the probability of the 45 puts closing out of the money was 61.31%.

Now, with PFE trading higher at 49.21, the probability of success stands at 89.57%, and the price of our 45 puts stands at $0.15. With 18 days until expiration and only $0.15 worth of premium left in our 45 puts, there is a good chance we buy back our 45 puts, lock in our premium and immediately sell more puts this week. If so, as always, I’ll send out an alert with all the trade details.


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

December 5, 2022.

Andy Crowder is a professional options trader, researcher and Senior Analyst at Cabot. 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.