COI Income Trader Issue: February 5, 2024

Weekly Commentary

We were able to sell some call premium in PFE and put premium in BITO. As a result, we now have 6 positions in the portfolio with the hope to add a few more sources of income over the next week or two.

January offered us another good month as we brought in over 12% worth of premium. Let’s continue to keep it simple, stay mechanical and allow the strategy to do the heavy lifting. Our total returns now sit at all-time highs of 124.9%. We introduced the portfolio in June 2022 and continue to be impressed by the resilient and consistent nature of the income wheel strategy during all market environments.

Current Positions

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 5, 2024.

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

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

Stock Watchlist – Weekly Trade Ideas

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 61.49, the probability of closing at expiration out of the money stands at 57.76%, and the price of the 61 puts sits at roughly $0.75. There are 19 days left in the February 23, 2024, expiration cycle. So far, so good.

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 60.36, the probability of closing at expiration out of the money stands at 73.49%, and the price of the 59 puts sits at roughly $0.39. There are 19 days left in the February 23, 2024, expiration cycle. Like the trades mentioned before, so far, so good.

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 41.59, the probability of closing at expiration out of the money stands at 48.53%, and the price of the 41 calls sits at roughly $2.70. There are 12 days left in the February 16, 2024, expiration cycle.

If DKNG closes above our 41 calls at expiration in 12 days, we will lock in some nice capital gains, and of course options premium. 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 within the next two weeks, so the current situation could change quickly.

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 28.02, the probability of closing at expiration out of the money stands at 72.35%, and the price of the 29 calls sits at roughly $0.30. There are 12 days left in the February 16, 2024, expiration cycle.

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 26.93, the probability of closing at expiration out of the money stands at 80.50%, and the price of the 29 calls sits at roughly $0.30. There are 47 days left in the March 22, 2024, expiration cycle.

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 20.35, the probability of closing at expiration out of the money stands at 59.57%, and the price of the 19 puts sits at roughly $0.84. There are 40 days left in the March 15, 2024, expiration cycle.

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 12, 2024.

Copyright © 2024. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.