Cabot Options Institute Income Trader – Alert (KO, BITO)
Coca-Cola (KO)
We allowed our January 20, 2023, 60 puts to expire worthless. As a result, per our Income Wheel guidelines, we will remain mechanical and sell more puts in KO today.
KO is currently trading for 60.50.
Here is the trade:
Sell to Open KO February 17, 2023, 59 puts for $0.62. (As always, prices will vary, please adjust accordingly.)
Delta of short call: 0.30
Probability of Profit: 68.15%
Probability of Touch: 63.35%
Total net credit: $0.62
Max return (cash-secured): 1.1% over 25 days
Risk Management
We use KO as part of our Income Wheel Portfolio, so if KO closes below our put strike at expiration, we will be assigned shares of KO (per the guidelines of the strategy). Until that point, we will repeatedly sell puts on KO. Of course, any necessary trade alerts/updates will follow.
Proshares Bitcoin ETF (BITO)
BITO rallied over the past expiration cycle and as a result, our January 20, 2023, 11.5 calls were assigned, and our entire position was “called” away last week. As a result, per our Income Wheel guidelines, we will remain mechanical and sell puts in BITO today.
BITO is currently trading for 14.54.
Here is the trade:
Sell to Open BITO February 17, 2023, 13.5 puts for $0.52. (As always, prices will vary, please adjust accordingly.)
Delta of short call: 0.30
Probability of Profit: 63.88%
Probability of Touch: 68.99%
Total net credit: $0.52
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.
