Weekly Commentary
The June 16, 2023 expiration cycle is finally behind us. Now we can focus on selling more premium in KO, GDX and PFE. All three have offered wonderful returns since being introduced to the Income Wheel Portfolio, and my guess is that they will continue to reside there for the foreseeable future.
As it stands, after the June 16, 2023 expiration cycle, our total return is 90.03%, or 7.5% per expiration cycle.
My intent is to sell more premium (income) in each stock today or tomorrow. In addition, I also intend to add a new position or two to the mix this week, bringing our total to seven positions. This should help to bring our total returns per expiration closer to 10% to 12.5% ... or at least that is the goal.
Current Positions
| Open Date | Ticker | Stock Price (open) | Stock Price (current) | Strategy | Trade | Open Price | Current Price | Delta |
| Income Wheel Portfolio - Open Trades | ||||||||
| 5/24/2023 | WFC | $40.77 | $42.18 | Short Put | July 21, 2023 37.5 Put | $1.01 | $0.34 | 0.13 |
| 5/18/2023 | BITO | $15.65 | $14.78 | Short Put | June 30, 2023 14 Put | $0.45 | $0.51 | 0.38 |
| Open Date | Close Date | Ticker | Strategy | Trade | Open Price | Closed Price | Profit | Return |
| Income Wheel Portfolio - Closed Trades | ||||||||
| 6/3/2022 | 7/8/2022 | PFE | Short Put | July 8, 2022 50 Put | $0.65 | $0.00 | $0.65 | 1.30% |
| 6/10/2022 | 7/15/2022 | GDX | Short Put | July 15, 2022 29 Put | $0.66 | Assigned at $29 | ($2.75) | -9.48% |
| 6/10/2022 | 7/15/2022 | BITO | Short Put | July 15, 2022 16 Put | $0.82 | Assigned at $16 | ($2.09) | -13.10% |
| 6/22/2022 | 7/21/2022 | WFC | Short Put | July 29, 2022 35 Put | $0.80 | $0.02 | $0.78 | 2.23% |
| 6/30/2022 | 8/10/2022 | KO | Short Put | August 19, 2022 57.5 Put | $0.70 | $0.03 | $0.67 | 1.20% |
| 7/21/2022 | 8/10/2022 | WFC | Short Put | August 19, 2022 39 Put | $0.46 | $0.04 | $0.42 | 1.08% |
| 7/18/2022 | 8/17/2022 | BITO | Covered Call | August 19, 2022 16 Call | $0.50 | $0.03 | $0.47 | 3.59% |
| 7/18/2022 | 8/17/2022 | GDX | Covered Call | August 19, 2022 28 Call | $0.63 | $0.05 | $0.57 | 2.22% |
| 7/11/2022 | 8/23/2022 | PFE | Short Put | August 19, 2022 50 Put | $1.00 | Assigned at $50 | $0.21 | 0.43% |
| 8/17/2022 | 9/7/2022 | BITO | Covered Call | September 23, 2022 16.5 Call | $0.55 | $0.03 | $0.52 | 4.00% |
| 8/17/2022 | 9/7/2022 | GDX | Covered Call | September 23, 2022 28 Call | $0.59 | $0.07 | $0.52 | 2.03% |
| 8/23/2022 | 9/23/2022 | PFE | Covered Call | October 21, 2022 50 Call | $1.50 | $0.09 | $1.41 | 2.82% |
| 8/10/2022 | 9/23/2022 | KO | Short Put | September 23, 2022 60 Put | $0.62 | Assigned at $60 | ($0.78) | -1.30% |
| 8/10/2022 | 9/23/2022 | WFC | Short Put | September 23, 2022 41 Put | $0.61 | Assigned at $41 | $0.02 | 0.05% |
| 9/7/2022 | 10/17/2022 | BITO | Covered Call | October 21, 2022 14 Call | $0.40 | $0.03 | $0.37 | 2.60% |
| 9/7/2022 | 10/17/2022 | GDX | Covered Call | October 21, 2022 26 Call | $0.70 | $0.04 | $0.66 | 2.50% |
| 9/26/2022 | 10/21/2022 | WFC | Covered Call | October 21, 2022 41 Call | $1.30 | Called away at $41 | $1.89 | 4.67% |
| 9/26/2022 | 10/21/2022 | KO | Covered Call | October 21, 2022 60 Call | $0.70 | $0.00 | $0.70 | 1.20% |
| 9/23/2022 | 1028/2022 | PFE | Covered Call | October 28, 2022 47 Call | $0.56 | Called away at $47 | $3.49 | 7.43% |
| 10/17/2022 | 11/17/2022 | BITO | Covered Call | November 25, 2022 13.5 Call | $0.38 | $0.03 | $0.35 | 2.60% |
| 10/25/2022 | 11/17/2022 | WFC | Short Put | November 25, 2022 43 Put | $0.96 | $0.07 | $0.89 | 2.00% |
| 10/17/2022 | 11/25/2022 | GDX | Covered Call | November 25, 2022 26 Call | $0.58 | Called away at $26 | $1.09 | 3.87% |
| 10/25/2022 | 11/25/2022 | KO | Covered Call | November 25, 2022 60 Call | $0.80 | Called away at $60 | $2.20 | 3.75% |
| 11/3/2022 | 12/8/2022 | PFE | Short Put | December 16, 2022 45 Put | $1.08 | $0.02 | $1.06 | 2.36% |
| 11/17/2022 | 12/19/2022 | BITO | Covered Call | December 30, 2022 12 Call | $0.45 | $0.04 | $0.41 | 3.42% |
| 11/17/2022 | 12/30/2022 | WFC | Short Put | December 30, 2022 44 Put | $1.02 | Assigned at $44 | ($1.37) | -3.11% |
| 11/29/2023 | 1/9/2023 | GDX | Short Put | January 20, 2023 26 Put | $0.87 | $0.02 | $0.85 | 3.27% |
| 12/8/2022 | 1/13/2023 | PFE | Short Put | January 13, 2023 49 Put | $0.62 | Assigned at $49 | ($0.53) | -1.08% |
| 12/19/2022 | 1/20/2023 | BITO | Covered Call | January 20, 2023 11.5 Call | $0.30 | Called away at $11.5 | $1.49 | 14.70% |
| 11/29/2022 | 1/20/2023 | KO | Short Put | January 20, 2023 60 Put | $0.84 | $0.00 | $0.84 | 1.40% |
| 1/5/2023 | 2/17/2023 | WFC | Covered Call | February 17, 2023 45 Call | $0.84 | Called away at $45 | $4.23 | 10.17% |
| 1/9/2023 | 2/17/2023 | GDX | Short Put | February 17, 2023 29 Put | $0.54 | Assigned at $29 | ($0.05) | -0.10% |
| 1/23/2023 | 2/17/2023 | KO | Short Put | February 17, 2023 59 Put | $0.62 | $0.00 | $0.62 | 1.05% |
| 1/23/2023 | 2/17/2023 | BITO | Short Put | February 17, 2023 13.5 Put | $0.52 | $0.00 | $0.52 | 3.85% |
| 1/20/2023 | 3/1/2023 | PFE | Covered Call | March 3, 2023 46 Call | $1.00 | $0.02 | $0.98 | 2.18% |
| 2/22/2023 | 3/23/2023 | BITO | Short Put | March 31, 2023 31 Put | $0.50 | $0.05 | $0.45 | 3.46% |
| 2/22/2023 | 3/29/2023 | KO | Short Put | March 31, 2023 59 Put | $0.86 | $0.02 | $0.84 | 1.42% |
| 3/1/2023 | 3/29/2023 | PFE | Covered Call | April 6, 2023 42 Call | $0.65 | $0.05 | $0.60 | 1.43% |
| 2/21/2023 | 3/31/2023 | GDX | Covered Call | March 31, 2023 29.5 Call | $0.75 | Called away at $29.5 | $1.84 | 6.48% |
| 2/23/2023 | 3/31/2023 | WFC | Short Put | March 31, 2023 43 Put | $0.53 | Assigned at $43 | ($4.87) | -11.32% |
| 3/29/2023 | 4/28/2023 | KO | Short Put | May 19, 2023 60 Puts | $0.76 | $0.08 | $0.68 | 1.13% |
| 3/29/2023 | 4/28/2023 | PFE | Covered Call | May 19, 2023 42.5 Call | $0.53 | $0.05 | $0.48 | 1.23% |
| 4/4/2023 | 5/8/2023 | GDX | Short Put | May 19, 2023 32 Put | $0.78 | $0.70 | $0.71 | 2.22% |
| 3/23/2023 | 5/18/2023 | BITO | Short Put | May 19, 2023 15 Put | $1.10 | $0.03 | $1.07 | 7.13% |
| 4/4/2023 | 5/19/2023 | WFC | Covered Call | May 19, 2023 40 Call | $0.55 | Called away at $40 | $3.94 | 10.76% |
| 4/28/2023 | 6/16/2023 | PFE | Covered Call | June 16, 2023 40 Call | $0.63 | Called away at $40 | $1.71 | 4.40% |
| 3/29/2023 | 6/16/2023 | KO | Short Put | June 16, 2023 62.5 Put | $0.70 | Assigned at $62.5 | ($0.13) | -0.21% |
| 5/8/2023 | 6/16/2023 | GDX | Short Put | June 16, 2023 34 Put | $0.91 | Assigned at $34 | ($1.70) | -5.00% |
| 88.93% | ||||||||
| Income Trader Portfolio | ||||||||
| 7/26/2022 | 8/17/2022 | JPM | Short Put | September 16, 2022 100 Put | $1.22 | $0.16 | $1.06 | 1.10% |
| 1.10% | ||||||||
Weekly High-Probability Mean Reversion Indicator
Here are the various levels I use to determine if an ETF is in an oversold or overbought state.
| Very Overbought | greater than or equal to 80.1 |
| Overbought | 60.1 to 80.0 |
| Neutral | 40.1 to 60 |
| Oversold | 20.1 to 40.0 |
| Very Oversold | less 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
| Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought | |
| ARK Innovation ETF | ARKK | 37.8 | 3.0 | 74.6 |
| Proshares Bitcoin ETF | BITO | 41.6 | 9.0 | 49.3 |
| iShares MSCI Emerging Markets | EEM | 15.7 | 9.0 | 73.9 |
| iShares MSCI EAFE | EFA | 12.5 | 6.7 | 63.4 |
| iShares MSCI Mexico ETF | EWW | 17.7 | 6.1 | 72.2 |
| iShares MSCI Brazil | EWZ | 26.8 | 0.5 | 69.4 |
| iShares China Large-Cap | FXI | 28.0 | 4.6 | 69.9 |
| Vaneck Gold Miners | GDX | 28.2 | 6.1 | 52.7 |
| SPDR Gold | GLD | 12.6 | 6.2 | 48.4 |
| iShares High-Yield | HYG | 7.5 | 2.4 | 61.3 |
| SPDR Regional Bank | KRE | 38.0 | 21.7 | 53.9 |
| iShares Silver Trust | SLV | 26.5 | 3.9 | 59.6 |
| iShares 20+ Treasury Bond | TLT | 15.0 | 0.7 | 55.2 |
| United States Oil Fund | USO | 32.6 | 8.1 | 58.6 |
| Proshares Ultra VIX Short | UVXY | 126.0 | 48.0 | 21.7 |
| Barclays S&P 500 VIX ETN | VXX | 72.0 | 20.7 | 22.4 |
| SPDR Biotech | XLB | 15.9 | 4.6 | 74.5 |
| SPDR Energy Select | XLE | 23.9 | 0.6 | 55 |
| SPDR Financials | XLF | 17.1 | 1.2 | 71.5 |
| SPDR Utilities | XLU | 14.9 | 1.1 | 72.4 |
| SPDR Retail | XRT | 25.7 | 7.9 | 57.9 |
Stock Watchlist – Weekly Trade Ideas
| Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought | |
| Bank of America | BAC | 28.1 | 7.1 | 56.1 |
| Bristol-Myers | BMY | 17.7 | 4.2 | 64.6 |
| Citigroup | C | 28.3 | 7.7 | 62.4 |
| Costco | COST | 17.1 | 0.1 | 61.6 |
| Cisco Systems | CSCO | 16.9 | 0.3 | 86.1 |
| CVS Health | CVS | 23.7 | 14.1 | 39.4 |
| Dow Inc. | DOW | 22.0 | 1.9 | 59 |
| Duke Energy | DUK | 16.9 | 4.7 | 62.1 |
| Ford | F | 33.4 | 2.8 | 86.4 |
| Gilead Sciences | GILD | 22.2 | 3.5 | 59.7 |
| General Motors | GM | 30.7 | 0.5 | 78.2 |
| Intel | INTC | 42.4 | 34.4 | 82.8 |
| Johnson & Johnson | JNJ | 13.7 | 0.6 | 86.1 |
| Coca-Cola | KO | 12.4 | 0.5 | 68.8 |
| Altria Group | MO | 15.2 | 0.8 | 35.3 |
| Merck | MRK | 20.8 | 14.1 | 40.2 |
| Marvell Tech. | MRVL | 42.7 | 1.8 | 59.6 |
| Morgan Stanley | MS | 24.9 | 5.9 | 64.5 |
| Micron | MU | 44.9 | 31 | 49.6 |
| Oracle | ORCL | 26.5 | 23.7 | 87.5 |
| Pfizer | PFE | 20.2 | 4.9 | 65 |
| Paypal | PYPL | 35.1 | 3.5 | 72.7 |
| Starbucks | SBUX | 19.7 | 0.6 | 66.5 |
| AT&T | T | 26.1 | 24.4 | 57.1 |
| Verizon | VZ | 21.4 | 16.2 | 70.7 |
| Walgreens Boots Alliance | WBA | 34.2 | 30.3 | 70.5 |
| Wells Fargo | WFC | 33.1 | 24.3 | 57.9 |
| Walmart | WMT | 14.8 | 0.5 | 66.4 |
| Exxon-Mobil | XOM | 25.4 | 2.9 | 42.3 |
Weekly Trade Discussion: Open Positions
Income Wheel Portfolio: Open Positions
Selling Puts: BITO June 30, 2023, 14 Puts
Original trade published on 5-18-2023 (click here to see original alert)
Current Comments: We sold the June 30, 2023, 14 puts for $0.45. At the time of the alert, BITO was trading for 15.65.
Now, with BITO trading for 14.78, the probability of success stands at 69.55%, and the price of the 14 puts sits at roughly $0.26. With two weeks until the June 30 expiration cycle our position continues to show promise. In fact, there is a good chance we will buy our puts back this week and sell more put premium for the August expiration cycle.
Selling Puts: WFC July 21, 2023, 37.5 Puts
Original trade published on 5-24-2023 (click here to see original alert)
Current Comments: We sold the July 21, 2023, 37.5 puts for $1.01. At the time of the alert, WFC was trading for 40.77.
Now, with WFC trading for 42.18, the probability of success stands at 85.65%, and the price of the 37.5 puts sits at $0.28. There are 32 days left in the July 21, 2023 expiration cycle, but, as it stands, so far, so good.
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 June 26, 2023.