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 Date | Ticker | Stock Price (open) | Stock Price (current) | Strategy | Trade | Open Price | Current Price | Delta |
| Income Wheel Portfolio – Open Trades | ||||||||
| 9/23/2022 | PFE | $44.07 | $44.95 | Covered Call | October 28, 2022 47 Call | $0.56 | $0.11 | 0.87 |
| 10/17/2022 | BITO | $12.01 | $11.97 | Covered Call | November 25, 2022 13.5 Call | $0.38 | $0.25 | 0.8 |
| 10/17/2022 | GDX | $23.57 | $24.34 | Covered Call | November 25, 2022 26 Call | $0.58 | $0.62 | 0.68 |
| Income Trades Portfolio – Open Trades | ||||||||
| 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 | Short Put | October 21, 2022 14 Call | $0.40 | $0.03 | $0.37 | 2.60% |
| 9/7/2022 | 10/17/2022 | GDX | Short Put | 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% |
| 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 | 68.1 | 55.9 | 44.4 |
| Proshares Bitcoin ETF | BITO | 71.2 | 14.8 | 46.8 |
| iShares MSCI Emerging Markets | EEM | 29.3 | 46.4 | 52.1 |
| iShares MSCI EAFE | EFA | 28.1 | 52.4 | 58.3 |
| iShares MSCI Mexico ETF | EWW | 30.4 | 55.1 | 73.3 |
| iShares MSCI Brazil | EWZ | 52.7 | 85.4 | 75.4 |
| iShares China Large-Cap | FXI | 46.3 | 51 | 31 |
| Vaneck Gold Miners | GDX | 51.3 | 64.4 | 58.3 |
| SPDR Gold | GLD | 18.9 | 25.6 | 49.1 |
| iShares High-Yield | HYG | 19.5 | 62.3 | 54.1 |
| SPDR Regional Bank | KRE | 36.1 | 46 | 44.1 |
| iShares Silver Trust | SLV | 37.9 | 54 | 55.6 |
| iShares 20+ Treasury Bond | TLT | 31.3 | 106.8 | 12 |
| United States Oil Fund | USO | 46.2 | 30.6 | 51.2 |
| Proshares Ultra VIX Short | UVXY | 104 | 11.5 | 42.8 |
| Barclays S&P 500 VIX ETN | VXX | 73.3 | 16.7 | 42.3 |
| SPDR Biotech | XLB | 33.4 | 62 | 61.7 |
| SPDR Energy Select | XLE | 41.1 | 53.6 | 75.4 |
| SPDR Financials | XLF | 31.8 | 49.4 | 58.8 |
| SPDR Utilities | XLU | 31.3 | 75.8 | 43.4 |
| SPDR Retail | XRT | 45.4 | 62.5 | 51 |
Stock Watchlist – Weekly Trade Ideas
Ticker Symbol | IV | IV Rank | HPMR Oversold – Overbought | |
| Bank of America | BAC | 39.7 | 50.6 | 70.2 |
| Bristol-Myers | BMY | 28.4 | 50.7 | 62.7 |
| Citigroup | C | 41.4 | 47 | 59.7 |
| Costco | COST | 33 | 35.4 | 56.5 |
| Cisco Systems | CSCO | 42.1 | 65.6 | 69.8 |
| CVS Health | CVS | 34.6 | 62.4 | 52.8 |
| Dow Inc. | DOW | 40 | 49.6 | 62.1 |
| Duke Energy | DUK | 32.7 | 58 | 41.7 |
| Ford | F | 60.1 | 60.7 | 55.6 |
| Gilead Sciences | GILD | 30.7 | 46.6 | 71.8 |
| General Motors | GM | 55.2 | 70.6 | 62 |
| Intel | INTC | 59.5 | 91 | 59.5 |
| Johnson & Johnson | JNJ | 21.4 | 31.4 | 69.4 |
| Coca-Cola | KO | 28.9 | 70 | 51.3 |
| Altria Group | MO | 31.7 | 59.4 | 55.4 |
| Merck | MRK | 27.2 | 25.1 | 75.1 |
| Marvell Tech. | MRVL | 65.6 | 62 | 47.4 |
| Morgan Stanley | MS | 39.3 | 50.8 | 52.2 |
| Micron | MU | 52.8 | 51.8 | 66.5 |
| Oracle | ORCL | 34 | 39.3 | 78.9 |
| Pfizer | PFE | 34.8 | 45.6 | 66.5 |
| Paypal | PYPL | 70.6 | 70.5 | 42.3 |
| Starbucks | SBUX | 43.1 | 74.4 | 54.9 |
| AT&T | T | 31.6 | 44.5 | 79.5 |
| Verizon | VZ | 32.3 | 58.2 | 29.7 |
| Walgreens Boots Alliance | WBA | 38.5 | 43.4 | 66 |
| Wells Fargo | WFC | 39.7 | 33.6 | 67.8 |
| Walmart | WMT | 32.9 | 72.9 | 69.3 |
| Exxon-Mobil | XOM | 39.8 | 54.9 | 75.6 |
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.