Weekly Commentary
I hope everyone had a well-rested couple of days from the market.
Early last week we started the income wheel process over again in BITO and DKNG by selling a few puts. Both have offered wonderful sources of income since being introduced to the portfolio, so I plan to continue to try and eke out as much options premium (and capital gains) as I can from both sources as long as they will allow.
I’ll be starting the same process in KO early this week. Our 55 calls were called away at expiration last week, so I’ll look to begin the income wheel approach over again by selling out-of-the-money puts sometime during the trading day today or tomorrow.
As I stated last week, our total returns now stand at over 123% and prove just how valuable our income wheel approach has been in bull, bear and sideways markets. While we predominantly hit singles and the occasional double, the slow and steady approach tends to always outperform over the long-term. But more importantly, we don’t see the volatility in our portfolio that more aggressive approaches tend to experience. Oftentimes, a smooth equity curve is overlooked and for those seeking a strategy that offers a steady stream of income, well, that really shouldn’t be the case.
Current Positions
| Open Date | Ticker | Stock Price (open) | Stock Price (current) | Strategy | Trade | Open Price | Current Price | Position Delta |
| Income Wheel Portfolio - Open Trades | ||||||||
| 11/9/2023 | PFE | $29.84 | $29.92 | Covered Call | December 15, 2023 31 Call | $0.62 | $0.62 | 0.96 |
| 11/13/2023 | GDX | $27.26 | $28.43 | Covered Call | January 19, 2023 29 Call | $0.62 | $0.62 | 0.67 |
| 10/23/2023 | WFC | $40.02 | $42.96 | Covered Call | December 1, 2023 41 Call | $0.87 | $0.88 | 0.51 |
| 11/20/2023 | BITO | $18.81 | $19.11 | Selling Puts | December 22, 2023 16.5 Put | $0.50 | $0.35 | 0.18 |
| 11/20/2023 | DKNG | $38.51 | $38.70 | Selling Puts | December 15, 2023 36 Put | $0.65 | $0.40 | 0.19 |
| 10/25/2023 | XLU | $59.00 | $62.29 | Selling Puts | December 15, 2023 56 Put | $0.56 | $0.20 | 0.11 |
| Open Date | Close Date | Ticker | Strategy | Trade | Open Price | Closed Price | Profit | Return |
| Income Wheel Portfolio - Closed Trades | ||||||||
| 6/2/2022 | 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% |
| 7/26/2022 | 8/17/2022 | JPM | Short Put | September 16, 2022 100 Put | $1.22 | $0.16 | $1.06 | 1.10% |
| 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 | 5/24/2023 | 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% |
| 5/18/2023 | 6/30/2023 | BITO | Short Put | June 30, 2023 14 Put | $0.45 | $0.01 | $0.44 | 3.14% |
| 5/24/2023 | 7/6/2023 | WFC | Short put | July 21, 2023 37.5 Put | $1.01 | $0.09 | $0.92 | 2.54% |
| 6/30/2023 | 7/24/2023 | DKNG | Short Put | August 18, 2023 22.5 Put | $0.63 | $0.09 | $0.54 | 2.40% |
| 7/6/2023 | 7/24/2023 | WFC | Short Put | August 25, 2023 40 Put | $0.76 | $0.12 | $0.64 | 1.60% |
| 6/21/2023 | 8/18/2023 | PFE | Short Put | August 18, 2023 37.5 Put | $0.64 | Assigned at $37.5 | ($0.24) | -0.64% |
| 6/21/2023 | 8/18/2023 | GDX | Covered Call | August 18, 2023 33 Call | $0.52 | $0.00 | $0.52 | 1.60% |
| 6/21/2023 | 8/18/2023 | KO | Covered Call | August 18, 2023 62.5 Call | $0.85 | $0.00 | $0.85 | 1.40% |
| 6/30/2023 | 8/18/2023 | BITO | Short Put | August 18, 2023 15 Put | $0.78 | Assigned at $15 | ($0.78) | -5.20% |
| 7/24/2023 | 9/14/2023 | DKNG | Short Put | September 15, 2023 28 Put | $1.36 | $0.02 | $1.34 | 4.79% |
| 8/21/2023 | 9/14/2023 | PFE | Covered Call | September 29, 2023 38 Call | $0.78 | $0.02 | $0.76 | 2.00% |
| 8/21/2023 | 9/14/2023 | KO | Covered Call | September 29, 2023 61 Call | $0.78 | $0.03 | $0.75 | 1.23% |
| 7/24/2023 | 9/15/2023 | WFC | Short Put | September 15, 2023 45 Put | $0.85 | Assigned at $45 | ($1.20) | -2.67% |
| 8/21/2023 | 9/29/2023 | BITO | CoveredCall | September 29, 2023 14 Call | $0.48 | $0.00 | $0.48 | 3.58% |
| 9/14/2023 | 10/13/2023 | PFE | CoveredCall | October 20, 2023 35 Call | $0.58 | $0.04 | $0.54 | 1.47% |
| 9/14/2023 | 10/13/2023 | KO | CoveredCall | October 27, 2023 59 Call | $0.95 | $0.03 | $0.92 | 1.49% |
| 9/14/2023 | 10/20/2023 | DKNG | Short Put | October 20, 2023 30 Put | $0.98 | Assigned at $30 | ($1.95) | -6.50% |
| 8/21/2023 | 10/20/2023 | GDX | Covered Call | October 20, 2023 29 Call | $0.86 | $0.00 | $0.86 | 3.11% |
| 9/18/2023 | 10/20/2023 | WFC | Covered Call | October 20, 2023 44.5 Call | $0.89 | $0.00 | $0.89 | 2.05% |
| 10/13/2023 | 11/9/2023 | PFE | Covered Call | November 24, 2023 34 Call | $0.62 | $0.03 | $0.59 | 1.80% |
| 10/23/2023 | 11/13/2023 | GDX | Covered Call | December 1, 2023 31.5 Call | $0.58 | $0.04 | $0.54 | 1.80% |
| 10/23/2023 | 11/17/2023 | DKNG | Covered Call | November 17, 2023 32 Call | $0.87 | Called away at $32 | $2.87 | 9.57% |
| 10/2/2023 | 11/17/2023 | BITO | Covered Call | November 17, 2023 15 Call | $0.47 | Called away at $15 | $0.47 | 3.13% |
| 10/13/2023 | 11/24/2023 | KO | Covered Call | November 24, 2023 55 Call | $0.75 | Called away at $55 | 123.72% | |
ETF Watchlist – Weekly Trade Ideas
| Exchange Traded Fund | Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought |
| ARK Innovation ETF | ARKK | 37.3 | 16.7 | 72.3 |
| ProShares Bitcoin ETF | BITO | 63.5 | 40.6 | 62.8 |
| SPDR Dow Jones | DIA | 11.7 | 10.9 | 81.4 |
| iShares MSCI Emerging Markets | EEM | 17.2 | 24.1 | 64.4 |
| iShares MSCI EAFE | EFA | 12.7 | 13 | 82.5 |
| iShares MSCI Mexico ETF | EWW | 21.1 | 20.3 | 72.1 |
| iShares MSCI Brazil | EWZ | 30.9 | 11.3 | 69.8 |
| iShares China Large-Cap | FXI | 29.2 | 13.3 | 52.3 |
| VanEck Gold Miners | GDX | 32.3 | 32.1 | 67.2 |
| SPDR Gold | GLD | 12.9 | 21 | 66.4 |
| iShares High-Yield | HYG | 7.7 | 26.1 | 71.7 |
| iShares Russell 2000 | IWM | 21.1 | 29.4 | 65.5 |
| SPDR Regional Bank | KRE | 31.3 | 10.8 | 60.5 |
| VanEck Oil Services | OIH | 32.0 | 21.5 | 44.4 |
| Invesco Nasdaq 100 | QQQ | 17.8 | 3.7 | 74.9 |
| iShares Silver Trust | SLV | 26.5 | 24.1 | 74.3 |
| VanEck Semiconductor | SMH | 26.2 | 13.6 | 67.9 |
| SPDR S&P 500 | SPY | 14.2 | 13.4 | 82.6 |
| iShares 20+ Treasury Bond | TLT | 18.5 | 36.3 | 56.3 |
| United States Oil Fund | USO | 40.8 | 59.8 | 42.1 |
| ProShares Ultra VIX Short | UVXY | 101.7 | 20.1 | 16.8 |
| CBOE Market Volatility Index | VIX | 85.6 | 44.6 | 20.3 |
| Barclays S&P 500 VIX ETN | VXX | 69.3 | 19.6 | 16.3 |
| SPDR Biotech | XLB | 15.1 | 12.7 | 80 |
| SPDR Energy Select | XLE | 22.4 | 14.6 | 53.3 |
| SPDR Financials | XLF | 15.6 | 4.1 | 86.9 |
| SPDR Utilities | XLU | 18.1 | 34.8 | 69.6 |
| SPDR S&P Oil & Gas Explorer | XOP | 28.7 | 16.3 | 46.9 |
| SPDR Retail | XRT | 26.7 | 34.4 | 66.1 |
Stock Watchlist – Weekly Trade Ideas
| Stock - Income Trader | Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought |
| Apple | AAPL | 21.0 | 3.9 | 67.8 |
| Bank of America | BAC | 27.6 | 17.7 | 70.3 |
| Bristol-Myers Squibb | BMY | 24.0 | 51.6 | 41.5 |
| Citigroup | C | 26.2 | 9.3 | 77.1 |
| Caterpillar | CAT | 24.4 | 15.2 | 52.7 |
| Comcast | CMCSA | 22.7 | 14.3 | 55.4 |
| Costco | COST | 21.3 | 32.5 | 67.3 |
| Cisco Systems | CSCO | 18.6 | 14.2 | 31.5 |
| Chevron | CVX | 22.0 | 18.5 | 48.3 |
| Disney | DIS | 24.4 | 1.4 | 80 |
| Duke Energy | DUK | 19.1 | 22.3 | 64.6 |
| FedEx | FDX | 26.6 | 19.7 | 71.3 |
| Gilead Sciences | GILD | 22.6 | 25.1 | 43.8 |
| General Motors | GM | 37.0 | 44.9 | 52.2 |
| Intel | INTC | 32.8 | 13.4 | 75.1 |
| Johnson & Johnson | JNJ | 18.8 | 46.8 | 71.1 |
| JPMorgan | JPM | 18.9 | 4.2 | 83.7 |
| Coca-Cola | KO | 16.5 | 28.5 | 85.4 |
| Altria Group | MO | 18.4 | 27.5 | 73.1 |
| Merck | MRK | 20.3 | 23.3 | 44.3 |
| Morgan Stanley | MS | 23.3 | 9.7 | 59.7 |
| Microsoft | MSFT | 22.6 | 15.3 | 67.4 |
| NextEra Energy | NEE | 29.4 | 46.2 | 54.8 |
| Nvidia | NVDA | 50.8 | 41.8 | 46.8 |
| Pfizer | PFE | 30.0 | 64.5 | 58 |
| PayPal | PYPL | 32.6 | 13.1 | 49.7 |
| Starbucks | SBUX | 18.5 | 1.4 | 46.8 |
| AT&T | T | 20.6 | 0.1 | 77.5 |
| Verizon | VZ | 18.1 | 4 | 86.6 |
| Walgreens Boots Alliance | WBA | 41 | 61.6 | 46.4 |
| Wells Fargo | WFC | 25.7 | 5.5 | 68.7 |
| Walmart | WMT | 18.1 | 31.5 | 34 |
| Exxon Mobil | XOM | 24 | 15.8 | 49.4 |
Weekly Trade Discussion: Open Positions
Income Wheel Portfolio: Open Positions
Covered Calls: PFE December 15, 2023, 31 Calls
Original trade published on 11-9-2023 (click here to see original alert)
Current Comments: We sold the December 15, 2023, 31 calls for $0.62. At the time of the alert, PFE was trading for 29.84.
Now, with PFE trading for 30.50, the probability of closing at expiration out-of-the-money stands at 60.47%, and the price of the 31 calls sits at $0.63. There are 19 days left in the December 15, 2023 expiration cycle so there isn’t much to do other than to allow time decay to work its magic.
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 29.32, the probability of closing at expiration out-of-the-money stands at 44.94%, and the price of the 29 calls sits at $1.35. There are 54 days left in the January 19, 2024 expiration cycle. We are still early in the trade so there isn’t much to do at the moment other than to allow time decay to work its magic.
Covered Calls: WFC December 1, 2023, 41 Calls
Original trade published on 10-23-2023 (click here to see original alert)
Current Comments: We sold the December 1, 2023, 41 calls for $0.87. At the time of the alert, WFC was trading for 40.02.
Now, with WFC trading for 42.92, the probability of closing out-of-the-money stands at 10.61%, and the price of the 41 calls sits at $2.01. There are 5 days left in the December 1, 2023 expiration cycle and not much to do at the moment, other than to allow our position to run its course into the December 1 expiration cycle. It looks likely that our shares will be called away at expiration this Friday. If so, I’ll look to start the income wheel approach over again by selling more next Monday.
Covered Calls: XLU December 15, 2023, 56 Puts
Original trade published on 10-25-2023 (click here to see original alert)
Current Comments: We sold the December 15, 2023, 56 puts for $0.75. At the time of the alert, XLU was trading for 59.
Now, with XLU trading for 62.69, the probability of closing at expiration out-of-the-money stands at 91.14%, and the price of the 56 puts sits at roughly $0.20. There are 19 days left in the December 15, 2023, expiration cycle. XLU continues to rally off fresh 52-week lows. With 19 days left until expiration, my hope is that we can take this trade off within the next week or two and immediately sell more put premium.
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 December 4, 2023.
