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Income Trader
Reliable Income From Time-Tested Strategies

COI Income Trader Issue: March 25, 2024

The slow and steady approach continues to work in all market environments. We continue to tack on small gains each and every week via laddering. By laddering the expiration cycles of our positions, we have been able to collect income each and every week. This week, we locked in and added 2.3% to our total returns. Doesn’t sound like much to the uninitiated, but for those participating in the strategy our Income Trader portfolio continues to shine with a total return of 161.5%.

And it doesn’t stop there.

Weekly Commentary

The slow and steady approach continues to work in all market environments. We continue to tack on small gains each and every week via laddering. By laddering the expiration cycles of our positions, we have been able to collect income each and every week. This week, we locked in and added 2.3% to our total returns. Doesn’t sound like much to the uninitiated, but for those participating in the strategy our Income Trader portfolio continues to shine with a total return of 161.5%.

And it doesn’t stop there.

This week we are on track to lock in 4.0% in BITO and 3.0% in DKNG. Again, as we have spoken about numerous times over the past month, I want to continue to ladder our positions going forward so we have the ability to reap returns on a weekly basis. So, expect to see a few additional trades early this week including a new trade in GDX, XLU and a few others. We currently have four positions in the portfolio and my goal is to add another 3 to 4 to the mix.

As always, if you have any questions, comments or feedback, please never hesitate to email me at andy@cabotwealth.com.

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PricePosition Delta
Income Wheel Portfolio - Open Trades
1/30/2024PFE$27.42 $27.36 Covered CallMay 3, 2024 29 call$0.41 $0.46 0.7
3/5/2024BITO$31.72 $29.16 Selling PutsMarch 28, 2024 28 Put$1.05 $0.21 0.53
2/26/2024KO$61.05 $60.49 Selling PutsApril 5, 2024 60 Puts$0.60 $0.27 0.32
2/22/2024DKNG$40.33 $47.20 Selling PutsMarch 28, 2024 38 Put $1.15 $0.01 0.01
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%
11/13/20231/19/2024GDXCovered Call January 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%
2/2/20243/5/2024BITOShort PutMarch 15, 2024 19 Put$1.15 $0.06 $1.09 5.74%
2/12/20243/10/2024GDXCovered Call March 15, 2024 29 Call$0.44 Called away at $29$2.14 7.83%
2/26/20243/18/2024XLUShort PutMarch 28, 2024 59.5 Put$0.72 $0.05 $0.67 1.12%
1/30/20243/22/2024PFECovered Call March 22, 2024 29 Call$0.37 $0.01 $0.36 1.20%
161.54%

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 March 25, 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 ETFARKK37.023.546.9
ProShares Bitcoin ETFBITO81.576.940.1
SPDR Dow JonesDIA12.515.561.1
iShares MSCI Emerging MarketsEEM13.411.950.8
iShares MSCI EAFEEFA11.45.866.3
iShares MSCI Mexico ETFEWW20.523.360.2
iShares MSCI BrazilEWZ22.325.440.9
iShares China Large-CapFXI27.314.942.8
VanEck Gold MinersGDX31.540.653
SPDR Gold GLD12.446.157.1
iShares High-YieldHYG6.228.963.7
iShares Russell 2000IWM20.439.553
SPDR Regional BankKRE29.724.250.1
VanEck Oil ServicesOIH23.3-1.980.6
Invesco Nasdaq 100QQQ17.317.464.4
iShares Silver TrustSLV23.611.852
VanEck SemiconductorSMH33.263.865.2
SPDR S&P 500 SPY 12.912.568
iShares 20+ Treasury BondTLT13.51.355.1
United States Oil FundUSO27.08.158.5
ProShares Ultra VIX ShortUVXY89.811.531.2
CBOE Market Volatility IndexVIX80.955.534.5
Barclays S&P 500 VIX ETNVXX61.813.232.9
SPDR BiotechXLB13.522.167.1
SPDR Energy Select XLE16.7-2.278.7
SPDR FinancialsXLF14.99.362.5
SPDR UtilitiesXLU15.81562
SPDR S&P Oil & Gas ExplorerXOP21.0-0.976.1
SPDR Retail XRT20.627.462.1

Stock Watchlist – Weekly Trade Ideas

Stock - Income TraderTicker Symbol IVIV Rank HPMR Oversold - Overbought
AppleAAPL23.138.443
Bank of AmericaBAC25.520.770.1
Bristol-Myers SquibbBMY29.955.346.7
CitigroupC28.127.378.2
CaterpillarCAT26.330.469.7
ComcastCMCSA28.148.147.3
CostcoCOST18.214.547.3
Cisco SystemsCSCO16.26.957.7
ChevronCVX18.14.256
DisneyDIS24.520.271.1
Duke EnergyDUK18.210.250.1
Gilead SciencesGILD25.025.536.4
General MotorsGM27.77.473.9
IntelINTC38.936.543.4
Johnson & JohnsonJNJ18.245.124.6
JPMorganJPM23.238.268.8
Coca-ColaKO13.111.054.8
Altria GroupMO17.622.844.5
MerckMRK23.264.256.5
Morgan StanleyMS27.837.266.7
MicrosoftMSFT21.513.369.8
NextEra EnergyNEE24.927.675.2
NvidiaNVDA51.853.574.2
PfizerPFE24.736.942.7
PayPalPYPL34.119.564.3
StarbucksSBUX19.91939.9
AT&TT23.42440.9
VerizonVZ25.328.558.3
Walgreens Boots AllianceWBA50.67938.7
Wells FargoWFC27.124.453.4
WalmartWMT16.128.354.8
Exxon MobilXOM18.70.184.5

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

Covered Calls: PFE May 3, 2024, 29 Calls
Original trade published on 3-22-2024 (click here to see original alert)

Current Comments: We sold the May 3, 2024, 29 calls for $0.41. At the time of the alert, PFE was trading for 27.42.

Now, with PFE trading for 27.36, the probability of closing at expiration out of the money stands at 75.62%, and the price of the 29 calls sits at roughly $0.46. There are 40 days left in the May 3, 2024, expiration cycle. We are early in the trade, but so far, so good.

COI_IT_032524_PFE.png

Selling Puts: BITO March 28, 2024, 28 Puts
Original trade published on 3-5-2024 (click here to see original alert)

Current Comments: We sold the March 28, 2024, 28 puts for $1.05. At the time of the alert, BITO was trading for 31.72.

Now, with BITO trading for 29.16, the probability of closing at expiration out of the money stands at 64.51%, and the price of the 28 puts sits at roughly $0.53. There are 4 days left in the March 28, 2024, expiration cycle. There is a good chance we will be adding to our total returns of over 45% in BITO at the March 28 expiration cycle if the ETF stays above the 28 strike over the next 4 days. I will likely buy back our puts early this week, lock in some profits and immediately sell more puts.

COI_IT_032524_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 47.20, the probability of closing at expiration out of the money stands at 99.49%, and the price of the 38 puts sits at roughly $0.01. There are 4 days left in the March 28, 2024, expiration cycle.

COI_IT_032524_DKNG.png

Selling Puts: KO April 5, 2024, 60 Puts
Original trade published on 2-26-2024 (click here to see original alert)

Current Comments: We sold the April 5, 2024, 60 puts for $0.60. At the time of the alert, KO was trading for 61.05.

Now, with KO trading for 60.49, the probability of closing at expiration out of the money stands at 65.91%, and the price of the 60 puts sits at roughly $0.27. There are 12 days left in the April 5, 2024, expiration cycle. We will continue to hold until the price of our 60 puts hits $0.10 or less. At that time we will buy back our puts, lock in profits and immediately sell more puts.

COI_IT_032524_KO.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 April 1, 2024.


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