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Income Trader
Reliable Income From Time-Tested Strategies

January 11, 2024

There is little to no value left in our XLU January 19, 2024, 61 puts. As a result, I’m going to buy them back, lock in some nice profits and immediately sell more premium. I’ll be doing the same in a few other positions as we move throughout the rest of the week.

SPDR Utilities ETF (XLU)

There is little to no value left in our XLU January 19, 2024, 61 puts. As a result, I’m going to buy them back, lock in some nice profits and immediately sell more premium. I’ll be doing the same in a few other positions as we move throughout the rest of the week.

Moreover, I wanted to let everyone know that I will be holding my first subscriber-only webinar of the year next Wednesday at 12 ET. I’ll be discussing our performance from last year, what’s to come in 2024 and the state of our current positions. As always, come with lots of questions. Click here to attend.

XLU is currently trading for 62.92.

Here is the trade:

Buy to close XLU January 19, 2024, 61 put for $0.11. (As always, prices will vary, please adjust accordingly.)

COI_IT_011124_XLU_close.png

Once that occurs (or if you are new to the position):

Sell to Open XLU February 23, 2024, 61 put for $0.65. (As always, prices will vary, please adjust accordingly.)

COI_IT_011124_XLU_open.png

Delta of short call: 0.27
Probability of Closing Out-of-the-Money: 70.52%
Probability of Touch: 59.10%
Total net credit: $0.65
Max return (cash-secured): 1.1% over the next 43 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, there is little to no value left in our KO January 19, 2024, 57.5 puts. As a result, I’m going to buy them back, lock in some nice profits and immediately sell more premium.

KO is currently trading for 59.73.

Here is the trade:

Buy to Close KO January 19, 2024 57.5 puts for $0.04.

COI_IT_011124_KO_close.png

Once that occurs (or if you are new to the position):

Sell to Open KO February 23, 2024, 59 puts for $0.70.

COI_IT_011124_KO_open.png

Delta of short put: 0.36
Probability Closing Out-of-the-Money: 62.10%
Probability of Touch: 77.86%
Total net credit: $0.70
Max return (cash-secured): 1.2%

If you have any questions, please do not hesitate to email me at andy@cabotwealth.com


Andy Crowder is a professional options trader, researcher and Chief Analyst of Cabot Options Institute. 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.