Weekly Commentary
The June 16, 2023 expiration cycle is nearing and we have several positions due to expire. While I intend, as always, to stay mechanical and allow our KO and GDX puts positions to play out, I do plan on buying back our PFE 40 calls this week and immediately selling more call premium.
Other than that, I continue to search for positions to add to the mix. Of course, I would love to see a pullback over the next few weeks to sell puts at better prices. Nonetheless, I intend on slowly adding a trade or two as we near the June expiration cycle.
Current Positions
| Open Date | Ticker | Stock Price (open) | Stock Price (current) | Strategy | Trade | Open Price | Current Price | Delta |
| Income Wheel Portfolio - Open Trades | ||||||||
| 3/29/2023 | PFE | $40.15 | $38.36 | Covered Call | June 16, 2023 40 Call | $0.63 | $0.16 | 0.17 |
| 3/29/2023 | KO | $61.75 | $61.16 | Short Put | June 16, 2023 62.5 Put | $0.70 | $1.75 | 0.73 |
| 5/8/2023 | GDX | $35.43 | $31.41 | Short Put | June 16, 2023 34 Put | $0.91 | $2.63 | 0.94 |
| 5/24/2023 | WFC | $40.77 | $41.24 | Short Put | July 21, 2023 37.5 Put | $1.01 | $0.59 | 0.2 |
| 5/18/2023 | BITO | $15.65 | $15.29 | Short Put | June 30, 2023 14 Put | $0.45 | $0.23 | 0.23 |
| 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% |
| 89.74% | ||||||||
| 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 | 38.3 | 4.3 | 72.2 |
| Proshares Bitcoin ETF | BITO | 43.3 | 0.2 | 44.4 |
| iShares MSCI Emerging Markets | EEM | 16.1 | 4.0 | 63 |
| iShares MSCI EAFE | EFA | 13.8 | 2.3 | 55 |
| iShares MSCI Mexico ETF | EWW | 22.2 | 9.4 | 51.2 |
| iShares MSCI Brazil | EWZ | 28.6 | 1.9 | 67.1 |
| iShares China Large-Cap | FXI | 30.1 | 9.5 | 53.9 |
| Vaneck Gold Miners | GDX | 32.2 | 3.9 | 45.9 |
| SPDR Gold | GLD | 13.9 | 0.6 | 38.2 |
| iShares High-Yield | HYG | 8.0 | 2.9 | 61 |
| SPDR Regional Bank | KRE | 39.1 | 23.2 | 69 |
| iShares Silver Trust | SLV | 26.7 | 5.1 | 48.9 |
| iShares 20+ Treasury Bond | TLT | 16.0 | 5.0 | 47.3 |
| United States Oil Fund | USO | 38.5 | 32.8 | 53.8 |
| Proshares Ultra VIX Short | UVXY | 103.4 | 26.8 | 19.9 |
| Barclays S&P 500 VIX ETN | VXX | 63.1 | 9.7 | 20.1 |
| SPDR Biotech | XLB | 16.9 | 3.3 | 63.5 |
| SPDR Energy Select | XLE | 28.2 | 11.8 | 57.6 |
| SPDR Financials | XLF | 18.5 | 2.7 | 65.1 |
| SPDR Utilities | XLU | 16.4 | 4.7 | 41.1 |
| SPDR Retail | XRT | 25.8 | 3.2 | 54.3 |
Stock Watchlist – Weekly Trade Ideas
| Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought | |
| Bank of America | BAC | 29.6 | 8.8 | 62.9 |
| Bristol-Myers | BMY | 20.2 | 13.2 | 52.4 |
| Citigroup | C | 26.8 | 3.9 | 62.7 |
| Costco | COST | 19.7 | 1.3 | 72.3 |
| Cisco Systems | CSCO | 19.6 | 6 | 70.2 |
| CVS Health | CVS | 22.9 | 6.4 | 62.3 |
| Dow Inc. | DOW | 25.4 | 8.7 | 57.8 |
| Duke Energy | DUK | 20.9 | 6.4 | 40.2 |
| Ford | F | 33.8 | 2.6 | 62.9 |
| Gilead Sciences | GILD | 26.1 | 12.2 | 50.7 |
| General Motors | GM | 33.7 | 1.3 | 65.4 |
| Intel | INTC | 36.1 | 13.9 | 63.5 |
| Johnson & Johnson | JNJ | 16.5 | 4.5 | 52.5 |
| Coca-Cola | KO | 14.0 | 6 | 49.4 |
| Altria Group | MO | 18.8 | 9.6 | 60.2 |
| Merck | MRK | 22.0 | 27 | 48.4 |
| Marvell Tech. | MRVL | 45.3 | 6.5 | 68.8 |
| Morgan Stanley | MS | 25.3 | 4.8 | 58.5 |
| Micron | MU | 44.7 | 22.6 | 56.2 |
| Oracle | ORCL | 29.8 | 30.4 | 74.1 |
| Pfizer | PFE | 23 | 10.5 | 56.1 |
| Paypal | PYPL | 34.5 | 1.6 | 57.9 |
| Starbucks | SBUX | 20.8 | 2.1 | 39.9 |
| AT&T | T | 29.1 | 43.9 | 26.7 |
| Verizon | VZ | 30.4 | 42.8 | 29.2 |
| Walgreens Boots Alliance | WBA | 30.8 | 17.1 | 55.8 |
| Wells Fargo | WFC | 29.9 | 14.8 | 62 |
| Walmart | WMT | 16.2 | 3.8 | 54.9 |
| Exxon-Mobil | XOM | 27.9 | 11.5 | 52.5 |
Weekly Trade Discussion: Open Positions
Income Wheel Portfolio: Open Positions
Covered Calls: PFE June 16, 2023 40 Call
Original trade published on 4-24-2023 (click here to see original alert)
Current Comments: We sold the June 16, 2023, 40 calls for $0.63. At the time of the alert, PFE was trading for 38.77.
Now, with PFE trading for 38.36, the probability of success stands at 84.60%, and the price of the 40 calls sits at $0.16. There are 12 days left until expiration and with the price sitting at only $0.16, I plan on buying back our 40 calls this week. Once that occurs, I will immediately sell more call premium, preferably with the July 21 expiration cycle.
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 15.29, the probability of success stands at 72.80%, and the price of the 14 puts sits at roughly $0.23. We are still early in the expiration cycle, but our position continues to show promise.
Selling Puts: KO June 16, 2023, 62.5 Puts
Original trade published on 4-24-2023 (click here to see original alert)
Current Comments: We sold the June 16, 2023, 62.5 puts for $0.70. At the time of the alert, KO was trading for 63.80.
Now, with KO trading for 61.16, the probability of success stands at 26.17%, and the price of the 62.5 puts sits at $1.75. If KO closes below the 62.5 put strike at expiration in 12 days, no worries, we will simply be assigned shares at the 62.5 strike and immediately sell calls against our newly acquired shares.
Selling Puts: GDX June 16, 2023, 34 Puts
Original trade published on 5-8-2023 (click here to see original alert)
Current Comments: We sold the June 16, 2023, 34 puts for $0.91. At the time of the alert, GDX was trading for 35.43.
Now, with GDX trading for 31.41, the probability of success stands at 6.03%, and the price of the 34 puts sits at $2.64. Like KO, if GDX were to close below our June 16, 2023, 34 puts we would simply enter the covered call phase of the income wheel strategy, which would entail accepting shares at the 34 strike and immediately selling more call premium.
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 41.24, the probability of success stands at 76.44%, and the price of the 37.5 puts sits at $0.59. We are early in the trade, but 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 12, 2023.