ProShares Bitcoin ETF (BITO)
We’ve managed to lock in a return of 36.1% in BITO. Not many can say they’ve made money in BITO since the beginning of June 2022. Just another reason why more and more individual investors are flocking to the tried-and-true income wheel approach.
BITO is currently trading for 21.65.
Here is the trade:
Buy to Close BITO December 22, 2023, 16.5 put for $0.02. (As always, prices will vary, please adjust accordingly.)
Once that occurs (or if you are new to the position):
Sell to Open BITO January 19, 2024, 20 put for $0.78. (As always, prices will vary, please adjust accordingly.)
Delta of short call: 0.30
Probability of Profit: 63.48%
Probability of Touch: 68.56%
Total net credit: $0.78
Max return (cash-secured): 3.9%
Risk Management
We use BITO as part of our Income Wheel Portfolio, so if BITO closes below our put strike at expiration, we will be assigned shares of BITO (per the guidelines of the strategy). Until that point, we will repeatedly sell puts on BITO. Of course, any necessary trade alerts/updates will follow.
As always, if you have any questions, please feel free to email me at andy@cabotwealth.com.