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Income Trader
Reliable Income From Time-Tested Strategies

January 9, 2023

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.

COI_IT_010923_GDX_puts.png

Once that occurs:

Sell to Open GDX February 17, 2023, 29 puts for $0.54. (As always, prices will vary, please adjust accordingly.)

COI_IT_010923_GDX_puts_open.png

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%

Risk Management

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.

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.