As stated in our latest weekly update (out today), we locked in profits in both XLU and KO at expiration last Friday. Per our income wheel guidelines, it’s time to start selling more premium. Our total return has pushed to all-time highs of just over 145%. Remember, investing/trading is a marathon and not a sprint, and Income Trader has proven this mantra in just under two years. We continue to be thrilled with the results.
SPDR Utilities ETF (XLU)
After locking in our premium last Friday, it’s time to start selling more premium in XLU.
XLU is currently trading for 60.84.
Here is the trade:
Sell to Open XLU March 28, 2024, 59.5 put for $0.72. (As always, prices will vary, please adjust accordingly.)
Delta of short call: 0.33
Probability of Closing Out of the Money: 65.44%
Probability of Touch: 68.97%
Total net credit: $0.72
Max return (cash-secured): 1.2% over the next 31 days (or less)
Risk Management
We will use XLU as part of our Income Wheel Portfolio, so if XLU closes below our put strike at expiration, we will be assigned shares of XLU (per the guidelines of the strategy). Until that point, we will repeatedly sell puts on XLU. Of course, any necessary trade alerts/updates will follow.
Coca-Cola (KO)
Like our XLU position above, we locked in premium last Friday and now it’s time to sell even more premium.
KO is currently trading for 61.05.
Here is the trade:
Sell to Open KO April 5, 2024, 60 puts for $0.60.
Delta of short put: 0.32
Probability Closing Out of the Money: 66.13%
Probability of Touch: 69.18%
Total net credit: $0.60
Max return (cash-secured): 1.0%
If you have any questions, please do not hesitate to email me at andy@cabotwealth.com
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