Weekly Commentary
We allowed our three remaining October 20, 2023, positions to expire.
Our DraftKings (DKNG) puts closed in-the-money and as I discussed last week on our subscriber-only call, I plan to sell calls against our newly issued shares in DKNG on Monday.
Both our Wells Fargo (WFC) and Pfizer (PFE) call positions expired worthless, so we locked in all of the premium and we needed it to offset some of the losses in both stocks. I plan to sell more calls against both positions on Monday.
In addition to our income wheel trades, I’m going to add a few new tickers to the portfolio. I’m going to start the process early next week by selling some puts in an ETF with a conservative level of implied volatility, SPDR Utilities ETF (XLU). I’ll follow up the XLU trade with a stock or ETF (a few choices on my watch list) that has a significantly higher level of implied volatility, so while the options premium will be higher, the risk will be as well. Trade accordingly.
October expiration was definitely one of our weaker expiration cycles. In total, at expiration we brought in 1.62%. To put things into perspective, our total YTD gains going into October expiration were 75.96% with an average gain of 8.26% per expiration cycle. So, 1.62% was multiples lower than what we’ve been accustomed to over the past several months. But hey, given the current state of the market, I’ll gladly take the gains and move on to the next round of opportunities.
Current Positions
| Open Date | Ticker | Stock Price (open) | Stock Price (current) | Strategy | Trade | Open Price | Current Price | Delta |
| Income Wheel Portfolio - Open Trades | ||||||||
| 9/14/2023 | DKNG | $31.40 | $28.44 | Short Put | October 20, 2023 30 Put | $0.98 | $1.74 | 0.77 |
| 10/13/2023 | PFE | $32.40 | $32.11 | Covered Call | November 24, 2023 34 Call | $0.62 | $0.53 | 0.24 |
| 8/21/2023 | GDX | $27.61 | $28.95 | Covered Call | October 20, 2023 29 Call | $0.86 | $0.53 | 0.51 |
| 10/13/2023 | KO | $53.23 | $52.89 | Covered Call | November 24, 2023 55 Call | $0.75 | $0.70 | 0.3 |
| 9/18/2023 | WFC | $43.44 | $40.96 | Covered Call | October 20, 2023 44.5 Call | $0.89 | $0.04 | 0.05 |
| 10/2/2023 | BITO | $14.24 | $13.62 | Covered Call | November 17, 2023 15 Call | $0.47 | $0.20 | 0.22 |
| 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% |
| 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% |
| 75.96% | ||||||||
ETF Watchlist – Weekly Trade Ideas
| Exchange Traded Fund | Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought |
| ARK Innovation ETF | ARKK | 43.5 | 32.3 | 26.9 |
| ProShares Bitcoin ETF | BITO | 55.8 | 13 | 75.3 |
| SPDR Dow Jones | DIA | 17.2 | 40.9 | 29.8 |
| iShares MSCI Emerging Markets | EEM | 20.3 | 34.4 | 26.6 |
| iShares MSCI EAFE | EFA | 20.4 | 49.2 | 25.9 |
| iShares MSCI Mexico ETF | EWW | 30.1 | 74 | 28.5 |
| iShares MSCI Brazil | EWZ | 31.4 | 15.6 | 42 |
| iShares China Large-Cap | FXI | 31.2 | 15.5 | 24.4 |
| VanEck Gold Miners | GDX | 36.7 | 41.8 | 71.8 |
| SPDR Gold | GLD | 18.5 | 65.8 | 83.1 |
| iShares High-Yield | HYG | 10.2 | 27.1 | 26.5 |
| iShares Russell 2000 | IWM | 26.2 | 51.4 | 28.3 |
| SPDR Regional Bank | KRE | 40.9 | 26.1 | 30.1 |
| VanEck Oil Services | OIH | 36.6 | 36.4 | 44.5 |
| Invesco Nasdaq 100 | QQQ | 25.4 | 43.1 | 29.3 |
| iShares Silver Trust | SLV | 32.4 | 54.9 | 75.3 |
| VanEck Semiconductor | SMH | 33.9 | 41.9 | 30.3 |
| SPDR S&P 500 | SPY | 21.3 | 49.9 | 27.7 |
| iShares 20+ Treasury Bond | TLT | 25.3 | 68.9 | 32.1 |
| United States Oil Fund | USO | 43.8 | 63.7 | 62.2 |
| ProShares Ultra VIX Short | UVXY | 151.2 | 91.1 | 66.8 |
| CBOE Market Volatility Index | VIX | 121.5 | 73.9 | 71.4 |
| Barclays S&P 500 VIX ETN | VXX | 104.6 | 84.2 | 67.5 |
| SPDR Biotech | XLB | 23.3 | 49.4 | 27.6 |
| SPDR Energy Select | XLE | 27.5 | 36.4 | 53.2 |
| SPDR Financials | XLF | 23.7 | 37.5 | 26.5 |
| SPDR Utilities | XLU | 23.5 | 57.5 | 37.5 |
| SPDR S&P Oil & Gas Explorer | XOP | 33.1 | 32.1 | 57.8 |
| SPDR Retail | XRT | 28.6 | 34.9 | 43.3 |
Stock Watchlist – Weekly Trade Ideas
| Stock - Income Trader | Ticker Symbol | IV | IV Rank | HPMR Oversold - Overbought |
| Apple | AAPL | 31.5 | 44.9 | 29.4 |
| Bank of America | BAC | 34.4 | 35.3 | 35.3 |
| Bristol-Myers Squibb | BMY | 25.7 | 81.8 | 37.4 |
| Citigroup | C | 31.0 | 22.1 | 27.6 |
| Caterpillar | CAT | 40.6 | 89.9 | 21.4 |
| Comcast | CMCSA | 31.1 | 42.9 | 28.9 |
| Costco | COST | 23.9 | 43.6 | 31.3 |
| Cisco Systems | CSCO | 30.3 | 56.2 | 30.4 |
| Chevron | CVX | 27.8 | 44.8 | 52.6 |
| Disney | DIS | 38.1 | 46.9 | 40.5 |
| Duke Energy | DUK | 28.7 | 75.6 | 36.7 |
| FedEx | FDX | 29.6 | 31.9 | 23.4 |
| Gilead Sciences | GILD | 30.9 | 78.2 | 52.7 |
| General Motors | GM | 46.1 | 61.7 | 36.2 |
| Intel | INTC | 49.6 | 63.9 | 31.5 |
| Johnson & Johnson | JNJ | 21.4 | 66.9 | 29.4 |
| JPMorgan | JPM | 25.8 | 28.4 | 30.2 |
| Coca-Cola | KO | 22.6 | 61.6 | 56.6 |
| Altria Group | MO | 24.0 | 49.0 | 52.3 |
| Merck | MRK | 28.2 | 89.8 | 45.6 |
| Morgan Stanley | MS | 29.5 | 31.2 | 24 |
| Microsoft | MSFT | 33.8 | 60.9 | 46.3 |
| NextEra Energy | NEE | 41.5 | 94.0 | 34.6 |
| Nvidia | NVDA | 49.8 | 38.2 | 26.9 |
| Pfizer | PFE | 33.1 | 89.1 | 24.1 |
| PayPal | PYPL | 57.6 | 54.5 | 22.2 |
| Starbucks | SBUX | 36.6 | 62 | 62 |
| AT&T | T | 28.1 | 36 | 67.9 |
| Verizon | VZ | 30.4 | 72.4 | 50.8 |
| Walgreens Boots Alliance | WBA | 44.6 | 70.5 | 37.1 |
| Wells Fargo | WFC | 32.4 | 25 | 42.2 |
| Walmart | WMT | 25 | 56.2 | 40.1 |
| Exxon Mobil | XOM | 30.5 | 49.2 | 48.1 |
Weekly Trade Discussion: Open Positions
Covered Calls: PFE November 24, 2023, 34 Calls
Original trade published on 10-13-2023 (click here to see original alert)
Current Comments: We sold the November 24, 2023, 34 calls for $0.62. At the time of the alert, PFE was trading for 32.40.
Now, with PFE trading for 30.65, the probability of success stands at 89.85%, and the price of the 34 calls sits at $0.14. There are 33 days left in the November 24, 2023 expiration cycle. If the price of our calls dips below $0.10 over the coming days, I’ll most likely buy them back, lock in some profits and immediately sell more calls.
Covered Calls: KO November 24, 2023, 55 Calls
Original trade published on 10-13-2023 (click here to see original alert)
Current Comments: We sold the November 24, 2023, 55 calls for $0.75. At the time of the alert, KO was trading for 53.23.
Now, with KO trading for 54.57, the probability of success stands at 55.05%, and the price of the 55 calls sits at $1.26. There are 33 days left in the November 24, 2023 expiration cycle. KO has rallied off fresh 52-week lows. If KO continues to rally through our 55 calls at expiration in 33 days, no worries, our shares will be called away. As a result, we will lock in all options premium sold plus any capital gains from our held shares.
Covered Calls: BITO November 17, 2023, 15 Calls
Original trade published on 10-2-2023 (click here to see original alert)
Current Comments: We sold the November 17, 2023, 15 calls for $0.47. At the time of the alert, BITO was trading for 14.24.
Now, with BITO trading for 15.09, the probability of success stands at 46.55%, and the price of the 15 calls sits at $0.58. There are 26 days left in the November 17, 2023 expiration cycle. Similar to KO, if BITO continues to rally through our 15 calls at expiration in 26 days, no worries, our shares will be called away. As a result, we will lock in all options premium sold plus any capital gains from our held shares.
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 October 30, 2023.
