Cabot Options Institute Income Trader - Alert (WFC)
Wells Fargo (WFC)
WFC rallied over the past expiration cycle and as a result, our May 19, 2023, 40 calls were assigned, and our entire position was “called” away last week. We made 10.76% on the trade.
As a result of our WFC shares being called away, per our Income Wheel guidelines, we will remain mechanical and sell puts in WFC today.
WFC is currently trading for 40.77.
Here is the trade:
Sell to Open WFC July 21, 2023, 37.5 puts for $1.01. (As always, prices will vary, please adjust accordingly.)
Delta of short call: 0.26
Probability of Profit: 69.17%
Probability of Touch: 59.68%
Total net credit: $1.01
Max return (cash-secured): 2.7%
We use WFC as part of our Income Wheel Portfolio, so if WFC closes below our put strike at expiration, we will be assigned shares of WFC (per the guidelines of the strategy). Until that point, we will repeatedly sell puts on WFC. As always, any necessary trade alerts/updates will follow.