Cabot Options Institute Income Trader: Alert (BITO, DKNG)
ProShares Bitcoin ETF (BITO)
We’ve managed to lock in a return of 33.1% in BITO. 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. Just another reason why more and more individual investors are flocking to the tried-and-true income wheel approach.
BITO is currently trading for 18.81.
Here is the trade:
Sell to Open BITO December 22, 2023, 16.5 put for $0.50. (As always, prices will vary, please adjust accordingly.)
Delta of short call: 0.23
Probability of Profit: 70.67%
Probability of Touch: 54.85%
Total net credit: $0.50
Max return (cash-secured): 3.0%
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.
DraftKings (DKNG)
DKNG continues to be a great addition to the portfolio. We recently locked in 9.6% in options premium and capital gains. Now it’s time to start the income wheel cycle over again by selling puts in DKNG. Hopefully, our good fortune continues.
DKNG is currently trading for 38.51.
Here is the trade:
Sell to Open DKNG December 15, 2023, 36 put for $0.65. (As always, prices will vary, please adjust accordingly.)
Delta of short call: 0.24
Probability of Profit: 72.28%
Probability of Touch: 54.63%
Total net credit: $0.65
Max return (cash-secured): 1.8%
Risk Management
We use DKNG as part of our Income Wheel Portfolio, so if DKNG closes below our put strike at expiration, we will be assigned shares of DKNG (per the guidelines of the strategy). Until that point, we will repeatedly sell puts on DKNG. Of course, any necessary trade alerts/updates will follow.