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Income Trader
Reliable Income From Time-Tested Strategies

COI Income Trader Issue: December 4, 2023

As we move into the month of December all of our positions continue to thrive. Even if we see a pullback over the next month, unless it’s sharp, we should see some nice gains as we progress through the month. I also hope to add another trade to the portfolio, but I would like to see a reprieve before I sell a few puts. Implied volatility is currently quite low across the board and the market sits in an extreme short-term overbought state.

Weekly Commentary

As we move into the month of December all of our positions continue to thrive. Even if we see a pullback over the next month, unless it’s sharp, we should see some nice gains as we progress through the month.

I also hope to add another trade to the portfolio, but I would like to see a reprieve before I sell a few puts. Implied volatility is currently quite low across the board and the market sits in an extreme short-term overbought state. So, it’s tough to find opportunities to open a new position at the moment. If we see a short-term spike in volatility, hopefully towards the 15 level in the VIX, I expect I’ll dip a toe in. Until then, I’ll gladly sit on my hands and allow our current positions to work their magic.

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PricePosition Delta
Income Wheel Portfolio - Open Trades
11/9/2023PFE$29.84 $28.91 Covered CallDecember 15, 2023 31 Call$0.62 $0.10 0.88
11/13/2023GDX$27.26 $31.81 Covered CallJanuary 19, 2023 29 Call$0.62 $3.00 0.1
10/23/2023WFC$40.02 $45.02 Covered CallDecember 1, 2023 41 Call$0.87 $0.88 0.51
11/20/2023BITO$18.81 $19.27 Selling PutsDecember 22, 2023 16.5 Put$0.50 $0.23 0.14
11/20/2023DKNG$38.51 $39.00 Selling PutsDecember 15, 2023 36 Put$0.65 $0.23 0.14
10/25/2023XLU$59.00 $63.53 Selling PutsDecember 15, 2023 56 Put$0.56 $0.02 0.01
Open DateClose DateTickerStrategyTradeOpen Price Closed PriceProfitReturn
Income Wheel Portfolio - Closed Trades
6/2/20227/8/2022PFEShort 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%
7/26/20228/17/2022JPMShort PutSeptember 16, 2022 100 Put$1.22 $0.16 $1.06 1.10%
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%
4/4/20235/8/2023GDXShort PutMay 19, 2023 32 Put$0.78 $0.70 $0.71 2.22%
3/23/20235/18/2023BITOShort PutMay 19, 2023 15 Put$1.10 $0.03 $1.07 7.13%
4/4/20235/24/2023WFCCovered Call May 19, 2023 40 Call$0.55 Called away at $40$3.94 10.76%
4/28/20236/16/2023PFECovered Call June 16, 2023 40 Call$0.63 Called away at $40$1.71 4.40%
3/29/20236/16/2023KOShort PutJune 16, 2023 62.5 Put$0.70 Assigned at $62.5($0.13)-0.21%
5/8/20236/16/2023GDXShort PutJune 16, 2023 34 Put$0.91 Assigned at $34($1.70)-5.00%
5/18/20236/30/2023BITOShort PutJune 30, 2023 14 Put$0.45 $0.01 $0.44 3.14%
5/24/20237/6/2023WFCShort putJuly 21, 2023 37.5 Put$1.01 $0.09 $0.92 2.54%
6/30/20237/24/2023DKNGShort PutAugust 18, 2023 22.5 Put$0.63 $0.09 $0.54 2.40%
7/6/20237/24/2023WFCShort PutAugust 25, 2023 40 Put$0.76 $0.12 $0.64 1.60%
6/21/20238/18/2023PFEShort PutAugust 18, 2023 37.5 Put$0.64 Assigned at $37.5($0.24)-0.64%
6/21/20238/18/2023GDXCovered CallAugust 18, 2023 33 Call$0.52 $0.00 $0.52 1.60%
6/21/20238/18/2023KOCovered Call August 18, 2023 62.5 Call$0.85 $0.00 $0.85 1.40%
6/30/20238/18/2023BITOShort PutAugust 18, 2023 15 Put$0.78 Assigned at $15($0.78)-5.20%
7/24/20239/14/2023DKNGShort PutSeptember 15, 2023 28 Put$1.36 $0.02 $1.34 4.79%
8/21/20239/14/2023PFECovered Call September 29, 2023 38 Call$0.78 $0.02 $0.76 2.00%
8/21/20239/14/2023KOCovered Call September 29, 2023 61 Call$0.78 $0.03 $0.75 1.23%
7/24/20239/15/2023WFCShort PutSeptember 15, 2023 45 Put$0.85 Assigned at $45($1.20)-2.67%
8/21/20239/29/2023BITOCoveredCallSeptember 29, 2023 14 Call$0.48 $0.00 $0.48 3.58%
9/14/202310/13/2023PFECoveredCallOctober 20, 2023 35 Call$0.58 $0.04 $0.54 1.47%
9/14/202310/13/2023KOCoveredCallOctober 27, 2023 59 Call$0.95 $0.03 $0.92 1.49%
9/14/202310/20/2023DKNGShort PutOctober 20, 2023 30 Put$0.98 Assigned at $30($1.95)-6.50%
8/21/202310/20/2023GDXCovered CallOctober 20, 2023 29 Call$0.86 $0.00 $0.86 3.11%
9/18/202310/20/2023WFCCovered CallOctober 20, 2023 44.5 Call$0.89 $0.00 $0.89 2.05%
10/13/202311/9/2023PFECovered Call November 24, 2023 34 Call$0.62 $0.03 $0.59 1.80%
10/23/202311/13/2023GDXCovered Call December 1, 2023 31.5 Call$0.58 $0.04 $0.54 1.80%
10/23/202311/17/2023DKNGCovered Call November 17, 2023 32 Call$0.87 Called away at $32$2.87 9.57%
10/2/202311/17/2023BITOCovered Call November 17, 2023 15 Call$0.47 Called away at $15$0.47 3.13%
10/13/202311/24/2023KOCovered Call November 24, 2023 55 Call$0.75 Called away at $55($6.75)-10.80%
10/23/202312/1/2023WFCCovered CallDecember 1, 2023 41 Call$0.87 Called away at $41($3.13)-6.95%
105.97%

ETF Watchlist – Weekly Trade Ideas

Exchange Traded FundTicker Symbol IVIV Rank HPMR Oversold - Overbought
ARK Innovation ETFARKK38.318.179.1
Proshares Bitcoin ETFBITO58.252.560.5
SPDR Dow JonesDIA11.811.891.2
iShares MSCI Emerging MarketsEEM17.926.264
iShares MSCI EAFEEFA14.010.682.5
iShares MSCI Mexico ETFEWW19.915.474.8
iShares MSCI BrazilEWZ30.315.173.5
iShares China Large-CapFXI29.212.928.8
Vaneck Gold MinersGDX34.844.487.1
SPDR Gold GLD16.85081.4
iShares High-YieldHYG7.42.681.3
iShares Russell 2000IWM20.82678.2
SPDR Regional BankKRE31.920.382.3
Vaneck Oil ServicesOIH28.28.949
Invesco Nasdaq 100QQQ16.54.969.9
iShares Silver TrustSLV27.732.584.8
Vaneck SemiconductorSMH23.011.657.6
SPDR S&P 500 SPY 12.87.184.4
iShares 20+ Treasury BondTLT18.030.869.3
United States Oil FundUSO37.743.337.5
Proshares Ultra VIX ShortUVXY95.013.122.7
CBOE Market Volatility IndexVIX84.627.229.3
Barclays S&P 500 VIX ETNVXX64.814.222.6
SPDR BiotechXLB13.810.890.2
SPDR Energy Select XLE21.18.656.1
SPDR FinancialsXLF14.61.389.8
SPDR UtilitiesXLU17.123.373.1
SPDR S&P Oil & Gas ExplorerXOP25.98.451.3
SPDR Retail XRT25.627.281.7

Stock Watchlist – Weekly Trade Ideas

Stock - Income TraderTicker Symbol IVIV Rank HPMR Oversold - Overbought
AppleAAPL18.51.569.4
Bank of AmericaBAC23.87.482.7
Bristol-Myers SquibbBMY21.650.453.4
CitigroupC23.52.985.7
CaterpillarCAT22.37.274.8
ComcastCMCSA21.916.152
CostcoCOST19.625.066.4
Cisco SystemsCSCO15.35.540.1
ChevronCVX20.914.350.4
DisneyDIS21.34.350.8
Duke EnergyDUK17.816.875.8
FedexFDX31.332.178.1
Gilead SciencesGILD26.47.365.9
General MotorsGM29.79.184.7
IntelINTC39.48.459
Johnson & JohnsonJNJ15.920.885.1
JP MorganJPM15.90.189.2
Coca-ColaKO12.87.872.9
Altria GroupMO16.210.185.8
MerckMRK18.39.263.6
Morgan StanleyMS21.04.070.6
MicrosoftMSFT20.22.351.5
Nextera EnergyNEE25.231.771.4
NvidiaNVDA33.00.137.6
PfizerPFE26.048.832.5
PaypalPYPL31.912.770.1
StarbucksSBUX17.49.427.3
AT&TT197.289.4
VerizonVZ17.32.792.5
Walgreens Boots AllianceWBA439154.8
Wells FargoWFC22.30.187.1
WalmartWMT17.124.132.3
Exxon MobilXOM21.69.540.1

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

Covered Calls: PFE December 15, 2023, 31 Calls
Original trade published on 11-9-2023 (click here to see original alert)

Current Comments: We sold the December 15, 2023, 31 calls for $0.62. At the time of the alert, PFE was trading for 29.84.

Now, with PFE trading for 28.91, the probability of closing at expiration out of the money stands at 89.22%, and the price of the 31 calls sits at $0.10. There are 12 days left in the December 15, 2023, expiration cycle so there isn’t much to do other than to allow time decay to work its magic.

COI_IT_120423_PFE.png

Covered Calls: GDX January 19, 2024, 29 Calls
Original trade published on 11-13-2023 (click here to see original alert)

Current Comments: We sold the January 19, 2024, 29 calls for $0.62. At the time of the alert, GDX was trading for 27.26.

Now, with GDX trading for 31.81, the probability of closing at expiration out of the money stands at 11.08%, and the price of the 29 calls sits at $3.15. There are 47 days left in the January 19, 2024 expiration cycle. We are still early in the trade so there isn’t much to do at the moment other than to allow the price of GDX to vacillate. As it stands, GDX is well above its short strike of 29. If GDX closes above its call strike of 29, we will lock in the premium sold and any capital gains on the stock.

COI_IT_120423_GDX.png

Selling Puts: XLU December 15, 2023, 56 Puts
Original trade published on 10-25-2023 (click here to see original alert)

Current Comments: We sold the December 15, 2023, 56 puts for $0.75. At the time of the alert, XLU was trading for 59.

Now, with XLU trading for 63.53, the probability of closing at expiration out of the money stands at 98.63%, and the price of the 56 puts sits at roughly $0.02. There are 12 days left in the December 15, 2023, expiration cycle. XLU continues to rally off fresh 52-week lows. With 12 days left until expiration, I plan to take the trade off this week and immediately sell more put premium.

COI_IT_120423_XLU.png

Selling Puts: KO January 19, 2024, 57.5 Puts
Original trade published on 11-27-2023 (click here to see original alert)

Current Comments: We sold the January 19, 2023, 57.5 puts for $0.76. At the time of the alert, KO was trading for 58.36.

Now, with KO trading for 58.64, the probability of closing at expiration out of the money stands at 68.09%, and the price of the 57.5 puts sits at roughly $0.53. There are 47 days left in the January 19, 2023, expiration cycle. There isn’t much to do at the moment other than to allow time decay to work its magic.

COI_IT_120423_KO.png

Selling Puts: BITO December 22, 2023, 16.5 Puts
Original trade published on 11-20-2023 (click here to see original alert)

Current Comments: We sold the December 22, 2023, 16.5 puts for $0.50. At the time of the alert, BITO was trading for 18.81.

Now, with BITO trading for 19.27, the probability of closing at expiration out of the money stands at 82.19%, and the price of the 16.5 puts sits at roughly $0.23. There are 19 days left in the December 22, 2023, expiration cycle. So far, our trade looks to be in great shape. If we have the opportunity to buy our puts back for $0.10 to $0.15, we will do so and immediately sell more put premium.

COI_IT_120423_BITO.png

Selling Puts: DKNG December 15, 2023, 36 Puts
Original trade published on 11-20-2023 (click here to see original alert)

Current Comments: We sold the December 15, 2023, 36 puts for $0.65. At the time of the alert, DKNG was trading for 38.51.

Now, with DKNG trading for 39.00, the probability of closing at expiration out of the money stands at 84.30%, and the price of the 36 puts sits at roughly $0.24. There are 12 days left in the December 15, 2023, expiration cycle. So far, our trade looks to be in great shape. If we have the opportunity to buy our puts back for roughly $0.10, we will do so and immediately sell more put premium.

COI_IT_120423_DKNG.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 December 11, 2023.

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.