Cabot Options Institute Income Trader - Alert (BITO)
ProShares Bitcoin ETF (BITO)
Our BITO March 31, 2023 puts are essentially worthless, so we can lock in some decent profits and immediately sell more puts.
Not many can say they’ve made money in BITO since the beginning of June 2022. At the time we added our first BITO trade it was trading for approximately 18; now it stands at 16.89. Thankfully, due to our income wheel approach, we’ve managed to lock in 21.3% in BITO over the same time frame.
BITO is currently trading for 16.89.
Here is the trade:
Buy to Close BITO March 31, 2023, 13 puts for $0.05. (As always, prices will vary, please adjust accordingly.)
Once that occurs (or if you are new to the position):
Sell to Open BITO May 19, 2023 15 put for $1.10 (As always, prices will vary, please adjust accordingly)
Delta of short call: 0.29
Probability of Profit: 74.07%
Probability of Touch: 25.93%
Total net credit: $1.10
Max return (cash-secured): 7.3%
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.