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Income Trader
Reliable Income From Time-Tested Strategies

May 18, 2023

Cabot Options Institute Income Trader - Alert (BITO)

ProShares Bitcoin ETF (BITO)

Our BITO May 19, 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 15.65. Thankfully, due to our income wheel approach, we’ve managed to lock in 28.4% in BITO over the same time frame.

BITO is currently trading for 15.65.

Here is the trade:

Buy to Close BITO May 19, 2023, 15 puts for $0.03. (As always, prices will vary, please adjust accordingly.)

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

Sell to Open BITO June 30, 2023 14 put for $0.45 (As always, prices will vary, please adjust accordingly)

Delta of short call: 0.41
Probability of Profit: 69.85%
Probability of Touch: 58.00%
Total net credit: $0.45
Max return (cash-secured): 3.2%

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.

Andy Crowder is a professional options trader, researcher and Senior Analyst at Cabot. 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.