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Income Trader
Reliable Income From Time-Tested Strategies

Cabot Options Institute – Income Trader Issue: October 24, 2022

It’s going to be a short report this week with our monthly call last week and the October expiration cycle finally behind us. We covered a ton of information in our call so please, if you have the chance, take a listen when it’s convenient for you. Click here to listen.

We locked in a few more profits last week and will be doing the same this week, this time in PFE.

In addition, we need to sell more premium in KO and WFC early this week and, as mentioned in the latest subscriber-only event last week, I expect to add several new positions to the mix, most likely during the latter part of the week. My goal is to add two to three new underlying stocks to the portfolio over the next week or so.

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PriceDelta
Income Wheel Portfolio – Open Trades
9/23/2022PFE$44.07$44.95Covered CallOctober 28, 2022 47 Call$0.56$0.110.87
10/17/2022BITO$12.01$11.97Covered CallNovember 25, 2022 13.5 Call$0.38$0.250.8
10/17/2022GDX$23.57$24.34Covered CallNovember 25, 2022 26 Call$0.58$0.620.68
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$0.651.30%
6/10/20227/15/2022GDXShort PutJuly 15, 2022 29 Put$0.66Assigned at $29($2.75)-9.48%
6/10/20227/15/2022BITOShort PutJuly 15, 2022 16 Put$0.82Assigned at $16($2.09)-13.10%
6/22/20227/21/2022WFCShort PutJuly 29, 2022 35 Put$0.80$0.02$0.782.23%
6/30/20228/10/2022KOShort PutAugust 19, 2022 57.5 Put$0.70$0.03$0.671.20%
7/21/20228/10/2022WFCShort PutAugust 19, 2022 39 Put$0.46$0.04$0.421.08%
7/18/20228/17/2022BITOCovered CallAugust 19, 2022 16 Call$0.50$0.03$0.473.59%
7/18/20228/17/2022GDXCovered CallAugust 19, 2022 28 Call$0.63$0.05$0.572.22%
7/11/20228/23/2022PFEShort PutAugust 19, 2022 50 Put$1.00Assigned at $50$0.210.43%
8/17/20229/7/2022BITOCovered CallSeptember 23, 2022 16.5 Call$0.55$0.03$0.524.00%
8/17/20229/7/2022GDXCovered CallSeptember 23, 2022 28 Call$0.59$0.07$0.522.03%
8/23/20229/23/2022PFECovered CallOctober 21, 2022 50 Call$1.50$0.09$1.412.82%
8/10/20229/23/2022KOShort PutSeptember 23, 2022 60 Put$0.62Assigned at $60($0.78)-1.30%
8/10/20229/23/2022WFCShort PutSeptember 23, 2022 41 Put$0.61Assigned at $41$0.020.05%
9/7/202210/17/2022BITOShort PutOctober 21, 2022 14 Call$0.40$0.03$0.372.60%
9/7/202210/17/2022GDXShort PutOctober 21, 2022 26 Call$0.70$0.04$0.662.50%
9/26/202210/21/2022WFCCovered CallOctober 21, 2022 41 Call$1.30Called away at $41$1.894.67%
9/26/202210/21/2022KOCovered CallOctober 21, 2022 60 Call$0.70$0.00$0.701.20%
Income Trades Portfolio – Closed Trades
7/26/20228/17/2022JPMShort PutSeptember 16, 2022 100 Put$1.22$0.16$1.061.10%

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 RankHPMR Oversold –
ARK Innovation ETFARKK68.155.944.4
Proshares Bitcoin ETFBITO71.214.846.8
iShares MSCI Emerging MarketsEEM29.346.452.1
iShares MSCI EAFEEFA28.152.458.3
iShares MSCI Mexico ETFEWW30.455.173.3
iShares MSCI BrazilEWZ52.785.475.4
iShares China Large-CapFXI46.35131
Vaneck Gold MinersGDX51.364.458.3
SPDR GoldGLD18.925.649.1
iShares High-YieldHYG19.562.354.1
SPDR Regional BankKRE36.14644.1
iShares Silver TrustSLV37.95455.6
iShares 20+ Treasury BondTLT31.3106.812
United States Oil FundUSO46.230.651.2
Proshares Ultra VIX ShortUVXY10411.542.8
Barclays S&P 500 VIX ETNVXX73.316.742.3
SPDR BiotechXLB33.46261.7
SPDR Energy SelectXLE41.153.675.4
SPDR FinancialsXLF31.849.458.8
SPDR UtilitiesXLU31.375.843.4
SPDR RetailXRT45.462.551

Stock Watchlist – Weekly Trade Ideas

Ticker Symbol

IVIV RankHPMR Oversold –
Bank of AmericaBAC39.750.670.2
Cisco SystemsCSCO42.165.669.8
CVS HealthCVS34.662.452.8
Dow Inc.DOW4049.662.1
Duke EnergyDUK32.75841.7
Gilead SciencesGILD30.746.671.8
General MotorsGM55.270.662
Johnson & JohnsonJNJ21.431.469.4
Altria GroupMO31.759.455.4
Marvell Tech.MRVL65.66247.4
Morgan StanleyMS39.350.852.2
Walgreens Boots AllianceWBA38.543.466
Wells FargoWFC39.733.667.8

Weekly Trade Discussion: Open Positions

Covered Call: PFE October 28, 2022, 47 Calls
Original trade published on 9-23-2022 (click to see original alert)

Current Comments: At the time of the trade, PFE was trading for 44.07. We sold the October 28, 2022, 47 calls for a credit of $0.56. We’ve locked in a total of $3.06 worth of premium.

Several weeks ago we decided to sell premium going out to the October 28, 2022 expiration cycle for $0.56. The premium in our 47 calls now stands at $0.10 with four days left until expiration. The probability of success stands at 88.24%.

I intend to buy back our calls early this week and immediately sell more call premium, but if PFE manages to continue the push higher and test the 47 strike I am more than happy to hold on in hopes that PFE closes above the 47 strike at expiration on Friday.

Call Side:


Covered Call: GDX October 21, 2022, 26 Calls
Original trade published on 10-17-2022 (click here to see original alert)

Current Comments: There is nothing to report at the moment as we just placed the trade. I will be back next week with our typical information on the trade.

Covered Call: BITO October 21, 2022, 14 Calls
Original trade published on 10-17-2022 (click here to see original alert)

Current Comments: There is nothing to report at the moment as we just placed the trade. I will be back next week with our typical information on the trade.

The next Cabot Options Institute – Income Trader issue will be published on October 31, 2022.

Andy Crowder is a professional options trader, researcher and Chief Analyst of Cabot Options Institute. 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.