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Income Trader
Reliable Income From Time-Tested Strategies

COI Income Trader Issue: January 16, 2024

We have three positions due to expire this week, all of which are profitable positions. As a result, I’ll be selling more premium early next week to replace our expiring positions and hopefully adding another one to two positions to give us eight total income-producing positions in our portfolio. Otherwise, we will continue to allow our wheel-based approach to work its magic. So far, we’ve managed to reap a total return of 114.7% since initiating our Income Trader service for Cabot Wealth readers 19 months ago.

Weekly Commentary

We have three positions due to expire this week, all of which are profitable positions. As a result, I’ll be selling more premium early next week to replace our expiring positions and hopefully adding another one to two positions to give us eight total income-producing positions in our portfolio. Otherwise, we will continue to allow our wheel-based approach to work its magic. So far, we’ve managed to reap a total return of 114.7% since initiating our Income Trader service for Cabot Wealth readers 19 months ago.

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PricePosition Delta
Income Wheel Portfolio - Open Trades
12/18/2023PFE$27.42 $28.70 Covered CallJanuary 26, 2024 28 Call$0.46 $0.94 0.71
12/18/2023DKNG$35.40 $32.95 Covered CallJanuary 19, 2024 38 Call$0.83 $0.03 0.02
11/13/2023GDX$27.26 $29.70 Covered CallJanuary 19, 2023 29 Call$0.62 $0.88 0.79
12/20/2023BITO$21.65 $21.06 Selling PutsJanuary 19, 2024 20 Put$0.78 $0.37 0.33
1/11/2024XLU$62.92 $63.32 Selling PutsFebruary 23, 2024 61 Put$0.65 $0.50 0.23
1/11/2024KO$59.73 $60.39 Selling PutsFebruary 23, 2024 59 Put$0.70 $0.49 0.28
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%
114.70%

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 January 16, 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 ETFARKK39.729.329.1
ProShares Bitcoin ETFBITO68.559.341.8
SPDR Dow JonesDIA11.61054.9
iShares MSCI Emerging MarketsEEM16.317.843.9
iShares MSCI EAFEEFA13.213.459.5
iShares MSCI Mexico ETFEWW24.046.649.8
iShares MSCI BrazilEWZ25.31.149.4
iShares China Large-CapFXI29.026.339.2
VanEck Gold MinersGDX30.933.845.9
SPDR Gold GLD13.224.157.6
iShares High-YieldHYG8.818.668.9
iShares Russell 2000IWM9.729.738.1
SPDR Regional BankKRE31.218.735.1
VanEck Oil ServicesOIH31.217.935.7
Invesco Nasdaq 100QQQ16.99.665.3
iShares Silver TrustSLV26.222.845
VanEck SemiconductorSMH25.325.358.6
SPDR S&P 500 SPY 12.56.665.1
iShares 20+ Treasury BondTLT14.910.841.5
United States Oil FundUSO37.853.953
ProShares Ultra VIX ShortUVXY91.512.832.4
CBOE Market Volatility IndexVIX85.140.844.1
Barclays S&P 500 VIX ETNVXX62.41333
SPDR BiotechXLB14.215.434.1
SPDR Energy Select XLE22.614.142.4
SPDR FinancialsXLF16.07.550.7
SPDR UtilitiesXLU16.925.941.5
SPDR S&P Oil & Gas ExplorerXOP27.412.140.9
SPDR Retail XRT24.230.533.5

Stock Watchlist – Weekly Trade Ideas

Stock - Income TraderTicker Symbol IVIV Rank HPMR Oversold - Overbought
AppleAAPL24.534.542.4
Bank of AmericaBAC24.19.434.4
Bristol-Myers SquibbBMY26.979.433.3
CitigroupC25.08.552.5
CaterpillarCAT28.738.652.4
ComcastCMCSA29.448.139.8
CostcoCOST16.713.879.1
Cisco SystemsCSCO18.920.154.9
ChevronCVX24.633.645.7
DisneyDIS33.858.047.5
Duke EnergyDUK19.825.855.3
FedExFDX19.20.340.5
Gilead SciencesGILD25.139.371.5
General MotorsGM35.035.439.5
IntelINTC42.157.744.4
Johnson & JohnsonJNJ18.948.875.7
JPMorganJPM17.84.643.8
Coca-ColaKO13.613.067.8
Altria GroupMO18.532.350.1
MerckMRK19.816.387.6
Morgan StanleyMS25.820.833.8
MicrosoftMSFT27.850.280.9
NextEra EnergyNEE29.949.845.4
NvidiaNVDA35.77.082.1
PfizerPFE27.855.445.3
PayPalPYPL48.768.550.6
StarbucksSBUX31.676.529.1
AT&TT29.348.438.8
VerizonVZ24.339.248.8
Walgreens Boots AllianceWBA37.641.829.2
Wells FargoWFC23.52.227
WalmartWMT15.616.471.9
Exxon MobilXOM25.225.257.6

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

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 29.70, the price of the 29 calls sits at $0.88. There are 4 days left in the January 19, 2024, expiration cycle. As it stands, GDX is 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_011624_GDX.png

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.

Since we are so early into the trade there isn’t much to say at the moment, other than… so far, so good.

COI_IT_011624_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.

Since we are so early into the trade there isn’t much to say at the moment, other than… so far, so good.

COI_IT_011624_KO.png

Selling Puts: BITO January 19, 2024 20 Puts
Original trade published on 12-20-2023 (click here to see original alert)

Current Comments: We sold the January 19, 2024, 20 puts for $0.78. At the time of the alert, BITO was trading for 21.65.

Now, with BITO trading for 21.06, the probability of closing at expiration out of the money stands at 64.50%, and the price of the 20 puts sits at roughly $0.37. There are 4 days left in the January 19, 2024, expiration cycle. Our trade is in good shape.

COI_IT_011624_BITO.png

Selling Puts: PFE January 26, 2024 28 Covered Call
Original trade published on 12-18-2023 (click here to see original alert)

Current Comments: We sold the January 26, 2024, 28 calls for $0.46. At the time of the alert, PFE was trading for 26.90.

Now, with PFE trading for 28.70, the probability of closing at expiration out of the money stands at 30.02%, and the price of the 28 calls sit at roughly $0.94. There are 11 days left in the January 26, 2024, expiration cycle. So far, our trade is in good shape.

COI_IT_011624_PFE.png

Selling Puts: DKNG January 19, 2024 38 Covered Call
Original trade published on 12-18-2023 (click here to see original alert)

Current Comments: We sold the January 19, 2024, 38 calls for $0.83. At the time of the alert, DKNG was trading for 35.31.

Now, with DKNG trading for 32.95, the probability of closing at expiration out of the money stands at 98.01%, and the price of the 38 calls sit at roughly $0.03. There are 4 days left in the January 19, 2024, expiration cycle. Our trade is in great shape.

COI_IT_011624_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 January 22, 2024.

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.