February 22, 2024

DKNG continues to be a great addition to the portfolio. We recently locked in 17.1% in options premium and capital gains. Our total return is over 39% since adding the position to the portfolio. Now it’s time to start the income wheel cycle over again by selling puts in DKNG. Hopefully, our good fortune continues.

DraftKings (DKNG)

DKNG is currently trading for 40.33.

Here is the trade:

Sell to Open DKNG March 28, 2024, 38 put for $1.15. (As always, prices will vary, please adjust accordingly.)

Delta of short call: 0.30
Probability of Profit: 64.96%
Probability of Touch: 68.60%
Total net credit: $1.15
Max return (cash-secured): 3.0%

Risk Management

We use DKNG as part of our Income Wheel Portfolio, so if DKNG closes below our put strike at expiration, we will be assigned shares of DKNG (per the guidelines of the strategy). Until that point, we will repeatedly sell puts on DKNG. Of course, any necessary trade alerts/updates will follow.

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Andy Crowder

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.