Cabot Options Institute Income Trader – Alert (GDX)
VanEck Gold Miners (GDX)
GDX has rallied of late and, as a result, our January 20, 2023 26 puts are essentially worthless. That being said, I want to buy back our 26 puts, lock in a nice profit, and immediately sell more premium
GDX is currently trading for 31.59.
Here is the trade:
Buy to Close GDX January 20, 2023, 26 puts for $0.02.
Once that occurs:
Sell to Open GDX February 17, 2023, 29 puts for $0.54. (As always, prices will vary, please adjust accordingly.)
Delta of short call: 0.22
Probability of Profit: 73.78%
Probability of Touch: 51.19%
Total net credit: $0.54
Max return (cash-secured): 1.9%
We use GDX as part of our Income Wheel Portfolio, so if GDX closes below our put strike at expiration we will be assigned shares of GDX (per the guidelines of the strategy). Until that point, we will repeatedly sell puts on GDX. Of course, any necessary trade alerts/updates will follow.