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Income Trader
Reliable Income From Time-Tested Strategies

COI Income Trader Issue: September 25, 2023

All is well as we head towards the October 20, 2023, expiration cycle. Our BITO position is due to expire at the end of the week, and if all goes well, I intend to buy back our BITO calls, lock in profits and immediately sell more call premium. Otherwise, there isn’t much to do other than allow time decay to work its magic as we head closer and closer to the end of the October 20, 2023, expiration cycle. If our positions act accordingly, we have the opportunity to bring in 5% to 10% worth of call premium over the next 26 days.

Weekly Commentary

All is well as we head towards the October 20, 2023, expiration cycle. Our BITO position is due to expire at the end of the week, and if all goes well, I intend to buy back our BITO calls, lock in profits and immediately sell more call premium. Otherwise, there isn’t much to do other than allow time decay to work its magic as we head closer and closer to the end of the October 20, 2023, expiration cycle. If our positions act accordingly, we have the opportunity to bring in 5% to 10% worth of call premium over the next 26 days.

Current Positions

Open DateTickerStock Price (open)Stock Price (current)StrategyTradeOpen PriceCurrent PriceDelta
Income Wheel Portfolio - Open Trades
9/14/2023DKNG$31.40 $27.76 Short PutOctober 20, 2023 30 Put$0.98 $2.88 0.68
9/14/2023PFE$34.16 $32.69 Covered CallOctober 20, 2023 35 Call$0.58 $0.14 0.14
8/21/2023BITO$13.41 $13.62 Covered CallSeptember 29, 2023 14 Call$0.48 $0.12 0.29
8/21/2023GDX$27.61 $28.87 Covered CallOctober 20, 2023 29 Call$0.86 $0.86 0.5
9/14/2023KO$58.47 $57.60 Covered CallOctober 27, 2023 59 Call$0.95 $0.61 0.33
Open DateClose DateTickerStrategyTradeOpen Price Closed PriceProfitReturn
Income Wheel Portfolio - Closed Trades
6/3/20227/8/2022PFEShort 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%
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%
101.12%
Income Trader Portfolio
7/26/20228/17/2022JPMShort PutSeptember 16, 2022 100 Put$1.22 $0.16 $1.06 1.10%
1.10%

ETF Watchlist – Weekly Trade Ideas

Exchange Traded FundTicker Symbol IVIV Rank HPMR Oversold - Overbought
ARK Innovation ETFARKK38.316.514.4
ProShares Bitcoin ETFBITO41.13.849.3
SPDR Dow JonesDIA14.521.123.7
iShares MSCI Emerging MarketsEEM17.317.640
iShares MSCI EAFEEFA15.51531.4
iShares MSCI Mexico ETFEWW22.323.941.7
iShares MSCI BrazilEWZ28.5840
iShares China Large-CapFXI28.27.352.5
VanEck Gold MinersGDX28.611.443.8
SPDR Gold GLD10.84.152
iShares High-YieldHYG8.05.930.9
iShares Russell 2000IWM20.921.519.2
SPDR Regional BankKRE32.714.522.8
VanEck Oil ServicesOIH31.013.539.8
Invesco Nasdaq 100QQQ22.322.122.5
iShares Silver TrustSLV23.75.861.7
VanEck SemiconductorSMH29.419.426.1
SPDR S&P 500 SPY 17.021.320.1
iShares 20+ Treasury BondTLT16.517.432.9
United States Oil FundUSO30.61567
ProShares Ultra VIX ShortUVXY118.240.568.7
CBOE Market Volatility IndexVIX94.853.473.7
Barclays S&P 500 VIX ETNVXX79.73969.3
SPDR BiotechXLB17.218.119.3
SPDR Energy Select XLE23.312.435.5
SPDR FinancialsXLF19.219.722.7
SPDR UtilitiesXLU16.211.240.3
SPDR S&P Oil & Gas ExplorerXOP29.012.125
SPDR Retail XRT24.119.122.1

Stock Watchlist – Weekly Trade Ideas

Stock - Income TraderTicker Symbol IVIV Rank HPMR Oversold - Overbought
AppleAAPL25.320.939.7
Bank of AmericaBAC30.926.123.4
Bristol-Myers SquibbBMY21.124.734.7
CitigroupC31.724.531.3
CaterpillarCAT28.428.235.2
ComcastCMCSA24.616.444.7
CostcoCOST23.537.452.9
Cisco SystemsCSCO17.710.218.8
ChevronCVX20.49.254.3
DisneyDIS27.613.535.4
Duke EnergyDUK20.519.153.9
FedExFDX23.79.364
Gilead SciencesGILD23.625.835
General MotorsGM37.729.436.3
IntelINTC37.219.322.9
Johnson & JohnsonJNJ18.940.635.9
JPMorganJPM25.928.835.7
Coca-ColaKO15.419.430.2
Altria GroupMO18.620.320.4
MerckMRK21.428.232.8
Morgan StanleyMS28.929.630.5
MicrosoftMSFT27.830.926.2
NextEra EnergyNEE22.21750.9
NvidiaNVDA42.813.925
PfizerPFE23.223.518.4
PayPalPYPL35.614.222.2
StarbucksSBUX21.810.531.9
AT&TT30.95055.7
VerizonVZ24.129.635.7
Walgreens Boots AllianceWBA44.668.618.8
Wells FargoWFC31.323.433.5
WalmartWMT15.912.544
Exxon MobilXOM23.913.547.2

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

Selling Puts: DKNG October 20, 2023, 30 Puts
Original trade published on 9-14-2023 (click here to see original alert)

Current Comments: We sold the October 20, 2023, 30 puts for $0.98. At the time of the alert, DKNG was trading for 31.04.

Now, with DKNG trading for 27.76, the probability of success stands at 27.89%, and the price of the 30 puts sits at $2.89. There are still 26 days left in the October 20, 2023 expiration cycle. If DKNG closes below the 30 put strike at expiration, no worries, we will simply be put shares (100 shares per put contract sold) of DKNG and immediately begin to sell calls against our newly acquired shares.

COI_IT_092523_DKNG.png

Covered Calls: PFE October 20, 2023, 35 Calls
Original trade published on 9-14-2023 (click here to see original alert)

Current Comments: We sold the October 20, 2023, 35 calls for $0.58. At the time of the alert, PFE was trading for 34.16.

Now, with PFE trading for 32.69, the probability of success stands at 87.18%, and the price of the 35 calls sits at $0.14. There are 26 days left in the October 20, 2023, expiration cycle. If we see the price dip below $0.10, I’ll most likely buy back the calls, lock in some premium and immediately sell more calls going out further in duration.

COI_IT_092523_PFE.png

Covered Calls: BITO September 29, 2023, 14 Calls
Original trade published on 8-21-2023 (click here to see original alert)

Current Comments: We sold the September 29, 2023, 14 calls for $0.48. At the time of the alert, BITO was trading for 13.41.

Now, with BITO trading for 13.62, the probability of success stands at 72.38%, and the price of the 14 calls sits at $0.12. There are only 5 days left in the September 29, 2023 expiration cycle. If all goes well, I will look to buy our calls back early this week, lock in profits and immediately sell more calls.

COI_IT_092523_BITO.png

Covered Calls: GDX October 20, 2023, 29 Calls
Original trade published on 8-21-2023 (click here to see original alert)

Current Comments: We sold the October 20, 2023, 29 calls for $0.86. At the time of the alert, GDX was trading for 27.61.

Now, with GDX trading for 28.87, the probability of success stands at 52.55%, and the price of the 29 calls sits at $0.86. There are 26 days left in the October 20, 2023 expiration cycle. There’s not much to do at the moment other than allow time decay to slowly work its magic.

COI_IT_092523_GDX.png

Covered Calls: KO October 27, 2023, 59 Calls
Original trade published on 9-14-2023 (click here to see original alert)

Current Comments: We sold the October 27, 2023, 59 calls for $0.95. At the time of the alert, KO was trading for 58.47.

Now, with KO trading for 57.60, the probability of success stands at 68.34%, and the price of the 59 calls sits at $0.63. There are 33 days left in the October 27, 2023 expiration cycle. We are early in the trade so there is little to do other than patiently wait for time decay to accelerate and work its magic.

COI_IT_092523_KO.png

Covered Calls: WFC October 20, 2023, 44.5 Calls
Original trade published on 9-18-2023 (click here to see original alert)

Current Comments: We sold the October 20, 2023, 44.5 calls for $0.89. At the time of the alert, WFC was trading for 43.44.

Now, with WFC trading for 41.23, the probability of success stands at 83.97%, and the price of the 44.5 calls sits at $0.31. There are 26 days left in the October 20, 2023 expiration cycle. We are early in the trade so there is little to do other than patiently wait for time decay to accelerate and work its magic. However, if we see the price of our calls push below $0.15 over the next week or two, we will most likely buy back our calls, lock in profits and immediately sell more call premium.

COI_IT_092523_WFC.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 October 2, 2023.

Andy Crowder is a professional options trader, researcher and Senior Analyst at Cabot. Formerly with Oppenheimer & Co. in New York, Andy has leveraged his investment experience to develop his statistically based options trading strategy which applies probability theory to option valuations in order to execute risk-controlled trades. This proprietary strategy has been refined through two decades of research and real-world experience and has been featured in the Wall Street Journal, Seeking Alpha, and numerous other financial publications. Andy has helped thousands of option traders learn and implement his meticulous rules-driven options trading strategies through highly attended conferences, one-on-one coaching, webinars, and his work as a financial columnist. He currently resides in Bolton Valley, Vermont and when he’s not trading, teaching and writing about options, he enjoys spending time with his wife and two daughters, backcountry skiing, biking, running and enjoying all things outdoors.