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Income Trader
Reliable Income From Time-Tested Strategies

COI Income Trader Issue: February 12, 2024

We should be able to add to our total return of 124.9% at the end of this week as our GDX and DKNG positions are due to expire. The jump in our total return should be notable as we have the potential to add 17.1% through our DKNG position and 1.6% in GDX.

I plan to add one more position next week so stay tuned for a trade alert, possibly two as we move through the week.

Weekly Commentary

Before I get started I wanted everyone to be aware that the next Income Trader issue will go out next Tuesday (February 20) due to the upcoming market holiday on Monday.

We should be able to add to our total return of 124.9% at the end of this week as our GDX and DKNG positions are due to expire. The jump in our total return should be notable as we have the potential to add 17.1% through our DKNG position and 1.6% in GDX.

I plan to add one more position next week so stay tuned for a trade alert, possibly two as we move through the week.

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PricePosition Delta
Income Wheel Portfolio - Open Trades
1/23/2024DKNG$37.80 $43.38 Covered CallFebruary 16, 2024 41 Call$1.14 $3.95 0.3
1/23/2024GDX$27.84 $26.97 Covered CallFebruary 16, 2024 29 Call$0.45 $0.03 0.95
1/11/2024XLU$62.92 $60.27 Selling PutsFebruary 23, 2024 61 Put$0.65 $1.05 0.66
1/30/2024PFE$27.38 $27.56 Covered CallMarch 22, 2024 29 Call$0.37 $0.34 0.77
2/2/2024BITO$20.33 $22.54 Selling PutsMarch 15, 2024 19 Put$0.87 $0.35 0.16
1/11/2024KO$59.73 $59.56 Selling PutsFebruary 23, 2024 59 Put$0.70 $0.61 0.38
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%
10/25/202312/5/2023XLUShort PutDecember 15, 2023 56 Put$0.80 $0.02 $0.78 1.39%
11/9/202312/15/2023PFECovered Call December 15, 2023 31 Call$0.62 $0.00 $0.62 2.08%
11/20/202312/15/2023DKNGSelling PutsDecember 15, 2023 36 Put$0.65 Assigned at $36$0.00 0.00%
11/20/202312/20/2023BITOSelling PutsDecember 22, 2023 16.5 Put$0.50 $0.02 $0.48 2.91%
12/5/20231/11/2024XLUSelling PutsJanuary 19, 2024 61 Put$0.80 $0.11 $0.69 1.10%
11/27/20231/11/2024KOSelling PutsJanuary 19, 2024 57.5 Put$0.76 $0.04 $0.72 1.25%
12/18/20231/19/2024DKNGCovered Call January 19, 2024 38 Call$0.83 $0.00 $0.83 2.34%
11/13/20231/19/2024GDXCovered CallJanuary 19, 2024 29 Call$0.62 $0.00 $0.62 2.27%
12/20/20231/19/2024BITOSelling PutsJanuary 19, 2024 20 Put$0.78 $0.00 $0.78 3.90%
12/18/20231/26/2024PFECovered Call January 26, 2024 28 Call$0.46 $0.00 $0.46 1.68%
124.89%

Weekly High-Probability Mean Reversion Indicator

Below is my watch list of ETFs and stocks with the most liquid options headed into the week of February 12, 2024.

Here are the various levels I use to determine if an ETF is in an oversold or overbought state.

Very Overboughta reading greater than or equal to 80.0
Overboughtgreater than or equal to 60.0
Neutralbetween 40 to 60
Oversoldless than or equal 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

Exchange Traded FundTicker Symbol IVIV Rank HPMR Oversold - Overbought
ARK Innovation ETFARKK38.623.568.5
ProShares Bitcoin ETFBITO64.833.477.5
SPDR Dow JonesDIA11.59.864.7
iShares MSCI Emerging MarketsEEM15.511.866.5
iShares MSCI EAFEEFA12.612.656.9
iShares MSCI Mexico ETFEWW22.835.952.6
iShares MSCI BrazilEWZ24.530.746.2
iShares China Large-CapFXI30.839.251.9
VanEck Gold MinersGDX30.62933.6
SPDR Gold GLD11.16.443.6
iShares High-YieldHYG7.320.253.3
iShares Russell 2000IWM22.234.965.5
SPDR Regional BankKRE33.422.638
VanEck Oil ServicesOIH29.09.942.2
Invesco Nasdaq 100QQQ17.111.175.6
iShares Silver TrustSLV22.10.147.8
VanEck SemiconductorSMH30.054.680.7
SPDR S&P 500 SPY 12.98.877.1
iShares 20+ Treasury BondTLT15.213.639.4
United States Oil FundUSO31.527.763
ProShares Ultra VIX ShortUVXY93.215.135.3
CBOE Market Volatility IndexVIX82.236.741.2
Barclays S&P 500 VIX ETNVXX64.316.134.9
SPDR BiotechXLB14.312.854.4
SPDR Energy Select XLE20.33.148.4
SPDR FinancialsXLF14.53.364.5
SPDR UtilitiesXLU17.928.438.2
SPDR S&P Oil & Gas ExplorerXOP25.87.153.2
SPDR Retail XRT24.234.471.5

Stock Watchlist – Weekly Trade Ideas

Stock - Income TraderTicker Symbol IVIV Rank HPMR Oversold - Overbought
AppleAAPL20.217.150.5
Bank of AmericaBAC25.913.844.4
Bristol-Myers SquibbBMY23.145.158.6
CitigroupC25.79.344.1
CaterpillarCAT25.421.763.7
ComcastCMCSA27.333.231
CostcoCOST23.656.681.3
Cisco SystemsCSCO29.076.643.2
ChevronCVX20.814.754.4
DisneyDIS25.120.979.2
Duke EnergyDUK18.924.123.6
FedExFDX22.612.744.9
Gilead SciencesGILD29.723.019.3
General MotorsGM28.52.566.3
IntelINTC35.319.841.4
Johnson & JohnsonJNJ15.217.238.4
JPMorganJPM18.56.462
Coca-ColaKO17.942.242.2
Altria GroupMO16.716.140
MerckMRK16.80.962.1
Morgan StanleyMS23.714.536.8
MicrosoftMSFT20.02.174.6
NextEra EnergyNEE29.747.838.2
NvidiaNVDA57.067.084
PfizerPFE25.339.251.5
PayPalPYPL37.028.241.1
StarbucksSBUX20.519.675.1
AT&TT23.323.634.8
VerizonVZ19.315.729.5
Walgreens Boots AllianceWBA40.34939.8
Wells FargoWFC26.412.136.3
WalmartWMT23.76771.8
Exxon MobilXOM22.411.148.6

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

Selling Puts: XLU February 23, 2024, 61 Puts
Original trade published on 1-11-2024 (click here to see original alert)

Current Comments: We sold the February 23, 2024, 61 puts for $0.65. At the time of the alert, XLU was trading for 62.92.

Now, with XLU trading for 60.27, the probability of closing at expiration out of the money stands at 32.83%, and the price of the 61 puts sits at roughly $1.05. There are 12 days left in the February 23, 2024, expiration cycle. If XLU closes below 61 at expiration in 12 days, no big deal, we simply follow the rules of our income wheel approach and allow ourselves to be assigned the stock. Once the shares are in our possession we will continue to bring in income by selling calls against our newly acquired shares.

COI_IT_021224_XLU.png

Selling Puts: KO February 23, 2024, 59 Puts
Original trade published on 1-11-2024 (click here to see original alert)

Current Comments: We sold the February 23, 2024, 59 puts for $0.70. At the time of the alert, KO was trading for 59.73.

Now, with KO trading for 59.56, the probability of closing at expiration out of the money stands at 60.19%, and the price of the 59 puts sits at roughly $0.61. There are 12 days left in the February 23, 2024, expiration cycle. So far, so good.

COI_IT_021224_KO.png

Covered Calls: DKNG February 16, 2024, 41 Calls
Original trade published on 1-23-2024 (click here to see original alert)

Current Comments: We sold the February 16, 2024, 41 calls for $1.14. At the time of the alert, DKNG was trading for 37.80.

Now, with DKNG trading for 43.38, the probability of closing at expiration out of the money stands at 35.56%, and the price of the 41 calls sits at roughly $4.00. At the time of this writing, there are 5 days left in the February 16, 2024, expiration cycle.

If DKNG closes above our 41 calls at expiration in five days, we will lock in some nice capital gains (13.9%), and of course our options premium (3.2%). Moreover, we will start the income wheel process over and begin selling puts shortly after expiration. But let’s not get ahead of ourselves. DKNG is due to announce earnings this week (February 15), so the current situation could change quickly. Regardless of how DNKG reacts, we will continue to ride the income wave that DKNG has presented us since we initiated the position back at the end of May 2023.

COI_IT_021224_DKNG.png

Covered Calls: GDX February 16, 2024, 29 Calls
Original trade published on 1-23-2024 (click here to see original alert)

Current Comments: We sold the February 16, 2024, 29 calls for $0.45. At the time of the alert, GDX was trading for 27.84.

Now, with GDX trading for 26.97, the probability of closing at expiration out of the money stands at 95.29%, and the price of the 29 calls sits at roughly $0.03. There are 5 days left in the February 16, 2024, expiration cycle. I will most likely buy back our short calls early this week and immediately sell more calls for income.

COI_IT_021224_GDX.png

Covered Calls: PFE March 22, 2024, 29 Calls
Original trade published on 1-30-2024 (click here to see original alert)

Current Comments: We sold the March 22, 2024, 29 calls for $0.37. At the time of the alert, PFE was trading for 27.38.

Now, with PFE trading for 27.56, the probability of closing at expiration out of the money stands at 75.79%, and the price of the 29 calls sits at roughly $0.34. There are 41 days left in the March 22, 2024, expiration cycle. So far, so good.

COI_IT_021224_PFE.png

Selling Puts: BITO March 15, 2024, 19 Puts
Original trade published on 2-2-2024 (click here to see original alert)

Current Comments: We sold the March 15, 2024, 19 puts for $0.87. At the time of the alert, BITO was trading for 20.33.

Now, with BITO trading for 22.54, the probability of closing at expiration out of the money stands at 79.26%, and the price of the 19 puts sits at roughly $0.35. There are 33 days left in the March 15, 2024, expiration cycle. So far, so good. We continue to reap incredible benefits from our ongoing BITO position. While most have lost money in BITO, since we initiated our position, by using our income approach, we’ve managed to bring in close to 40% in income.

COI_IT_021224_BITO.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 February 20, 2024.


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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.