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Income Trader
Reliable Income From Time-Tested Strategies

COI Income Trader Issue: February 26, 2024

After we locked in a 17.1% gain in DKNG two weeks ago, we managed to lock in a fairly pedestrian 1.1% in XLU and 1.1% in KO.

The recent gains in XLU and KO, however, pushed our total return to all-time highs and a not-so-pedestrian 145.65%. I plan to continue our wheel-based approach in both XLU and KO early this week and plan to add a new ticker to the portfolio as well. Stay tuned!

Weekly Commentary

After we locked in a 17.1% gain in DKNG two weeks ago, we managed to lock in a fairly pedestrian 1.1% in XLU and 1.1% in KO.

The recent gains in XLU and KO, however, pushed our total return to all-time highs and a not-so-pedestrian 145.65%. I plan to continue our wheel-based approach in both XLU and KO early this week and plan to add a new ticker to the portfolio as well. Stay tuned!

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PricePosition Delta
Income Wheel Portfolio - Open Trades
2/12/2024GDX$27.30 $26.66 Covered CallMarch 15, 2024 29 Call$0.44 $0.15 0.85
1/30/2024PFE$27.38 $27.76 Covered CallMarch 22, 2024 29 Call$0.37 $0.32 0.72
2/2/2024BITO$20.33 $24.15 Selling PutsMarch 15, 2024 19 Put$0.87 $0.13 0.07
2/22/2024DKNG$40.33 $41.28 Selling PutsMarch 28, 2024 38 Put $1.15 $0.77 0.24
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%
11/20/202312/15/2023DKNGShort PutDecember 15, 2023 36 Put$0.65 Assigned at $36$0.00 0.00%
11/20/202312/20/2023BITOShort PutDecember 22, 2023 16.5 Put$0.50 $0.02 $0.48 2.91%
12/5/20231/11/2024XLUShort PutJanuary 19, 2024 61 Put$0.80 $0.11 $0.69 1.10%
11/27/20231/11/2024KOShort PutJanuary 19, 2024 57.5 Put$0.76 $0.04 $0.72 1.25%
12/18/20231/19/2024DKNGCovered CallJanuary 19, 2024 38 Call$0.83 $0.00 $0.83 2.34%
11/13/20231/19/2024GDXShort PutJanuary 19, 2024 29 Call$0.62 $0.00 $0.62 2.27%
12/20/20231/19/2024BITOShort PutJanuary 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%
1/23/20242/12/2024GDXCovered Call February 16, 2024 29 call$0.45 $0.04 $0.41 1.47%
1/23/20242/16/2024DKNGCovered Call February 16, 2024 41 Call$1.14 Called away at $41$6.14 17.10%
1/11/20242/23/2024XLUShort PutFebruary 23, 2024 61 Put$0.65 $0.00 $0.65 1.07%
1/11/20242/23/2024KOShort PutFebruary 23, 2024 59 Put$0.70 $0.00 $0.70 1.12%
145.65%

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 26, 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 ETFARKK43.326.448.6
ProShares Bitcoin ETFBITO63.640.162.5
SPDR Dow JonesDIA13.618.469.2
iShares MSCI Emerging MarketsEEM16.68.674.5
iShares MSCI EAFEEFA14.79.877.5
iShares MSCI Mexico ETFEWW23.440.337.8
iShares MSCI BrazilEWZ24.524.848.5
iShares China Large-CapFXI33.849.774.2
VanEck Gold MinersGDX36.542.145.2
SPDR Gold GLD11.828.164.8
iShares High-YieldHYG8.22.258.1
iShares Russell 2000IWM26.539.854.1
SPDR Regional BankKRE36.317.843.6
VanEck Oil ServicesOIH29.85.563.1
Invesco Nasdaq 100QQQ20.313.161.4
iShares Silver TrustSLV24.512.554.5
VanEck SemiconductorSMH33.943.668.3
SPDR S&P 500 SPY 15.411.671.5
iShares 20+ Treasury BondTLT15.610.654.8
United States Oil FundUSO34.424.248.9
ProShares Ultra VIX ShortUVXY102.814.436
CBOE Market Volatility IndexVIX86.242.743.8
Barclays S&P 500 VIX ETNVXX71.919.636.5
SPDR BiotechXLB16.310.177.2
SPDR Energy Select XLE21.91.661.5
SPDR FinancialsXLF16.89.176
SPDR UtilitiesXLU22.117.661.7
SPDR S&P Oil & Gas ExplorerXOP26.9663
SPDR Retail XRT32.331.368

Stock Watchlist – Weekly Trade Ideas

Stock - Income TraderTicker Symbol IVIV Rank HPMR Oversold - Overbought
AppleAAPL23.821.037
Bank of AmericaBAC27.411.058.5
Bristol-Myers SquibbBMY23.953.677.1
CitigroupC26.43.466.4
CaterpillarCAT27.515.862.4
ComcastCMCSA29.026.640.4
CostcoCOST24.952.378.6
Cisco SystemsCSCO18.711.840.6
ChevronCVX21.49.761.7
DisneyDIS24.411.755.3
Duke EnergyDUK19.615.947.8
FedExFDX32.734.159
Gilead SciencesGILD24.328.444.9
General MotorsGM30.23.468.1
IntelINTC40.212.540.8
Johnson & JohnsonJNJ17.917.771.9
JPMorganJPM20.29.683.4
Coca-ColaKO13.810.774
Altria GroupMO19.916.468.8
MerckMRK19.27.280.9
Morgan StanleyMS26.011.056.8
MicrosoftMSFT22.73.856.2
NextEra EnergyNEE31.546.647.9
NvidiaNVDA67.344.573.8
PfizerPFE26.940.259.3
PayPalPYPL36.820.548.5
StarbucksSBUX21.421.261.3
AT&TT22.718.542.3
VerizonVZ20.016.650.1
Walgreens Boots AllianceWBA41.963.842
Wells FargoWFC27.37.981.7
WalmartWMT1822.373.7
Exxon MobilXOM236.355.2

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

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 27.76, the probability of closing at expiration out of the money stands at 74.28%, and the price of the 29 calls sits at roughly $0.32. There are 26 days left in the March 22, 2024, expiration cycle. So far, so good.

COI_IT_022624_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 24.15, the probability of closing at expiration out of the money stands at 90.55%, and the price of the 19 puts sits at roughly $0.13. There are 19 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_022624_BITO.png

Selling Puts: DKNG March 28, 2024, 38 Puts
Original trade published on 2-22-2024 (click here to see original alert)

Current Comments: We sold the March 28, 2024, 38 puts for $1.15. At the time of the alert, DKNG was trading for 40.33.

Now, with DKNG trading for 41.28, the probability of closing at expiration out of the money stands at 72.31%, and the price of the 38 puts sits at roughly $0.77. There are 32 days left in the March 28, 2024, expiration cycle. So far, so good.

COI_IT_022624_DKNG.png

Selling Puts: GDX March 15, 2024, 29 Calls
Original trade published on 2-12-2024 (click here to see original alert)

Current Comments: We sold the March 15, 2024, 29 calls for $0.44. At the time of the alert, GDX was trading for 27.30.

Now, with GDX trading for 26.66, the probability of closing at expiration out of the money stands at 87.09%, and the price of the 29 calls sits at roughly $0.15. There are 19 days left in the March 15, 2024, expiration cycle. Like all of our other positions…so far, so good. 

COI_IT_022624_GDX.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 March 4, 2024.


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