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Options Trader
Basic Strategies for Big Profits in Any Market

Buy Call XBI

January 18, 2023
Sell Existing Position: Sell your Bio-tech ETF (XBI) January 84 Calls for $3.75 or more

With just two and a half days until expiration, it is time to move on from our XBIcalls, as I see little edge in holding this position for a couple more days. This final piece will be sold for a loss, though we had sold a third for a profit of 22.92%, and another piece for a gain of 63.77%.

To execute this trade you need to:

Sell to Close your XBI January 84 Calls

Please note, it is entirely possible that the XBI will trade higher in the days to come, and selling today will be a small mistake. However, there is an equal likelihood that the XBI will fall. Because of that uncertainty, I am going to sell today.

Finally, we are also holding a SBUX position that will expire on Friday. Expect a sale of this position as well in the coming days, depending on market conditions.

August 8, 2022
Sell a Third of Existing Position: Sell a Third of your XBI January 84 Calls for $16.60 or more.

The market is flying higher today, though if I wanted to be glass half empty, the “trash” stocks are leading in early trade this morning.

Regardless, our XBI calls are now at a quick profit of approximately 60%. I am going to stick to the system, and am going to sell another third of our position into this sector strength.

To execute this trade you need to:
Sell to Close a Third of your XBI January 84 Calls

Please note, I will not sell another piece of this position until it is time to fully exit this trade.

August 4, 2022
Sell a Third of Existing Position: Sell a Third of Your XBI January 84 Calls for $12.30 or more.

Very quickly our XBI calls that were purchased yesterday are at a profit of approximately 20%. And while I think the ETF looks great, let’s stick to the system, lock in gains on a piece of this position and then let the balance of our calls run for greater profits.

To execute this trade you need to:
Sell to Close a Third of your XBI January 84 Calls

As is always the case when we sell a piece of our position, we hope this initial sale is a big mistake and the balance of our calls trade much higher in the days/weeks to come.

August 3, 2022
Buy the Biotech ETF (XBI) January 84 Calls (exp. 1/2023) for $11 or less.

As I’ve written a couple times recently, I’ve been intrigued by Biotech (XBI), as the sector got ahead of the market rally in June, then rested for much of July. Throughout these time frames option activity has been very strong, with these two trades being a small sample of the activity:

Today - Buyer of 5,000 Bio-tech ETF (XBI) September 90 Calls for $3.05 – Stock at 85 (rolled from August calls)Last Thursday - Buyer of 20,000 Biotech ETF (XBI) January 85/105 Bull Call Spread and Sale of January 75 Puts – Stock at 82.5

The trade today is “nice,” but the real draw for bringing me into a position is the bull risk/reversal purchased last week, as well as many breakouts I’m tracking in individual biotech stocks. For those reasons, I am going to add the XBI to the portfolio today:

To execute this trade you need to:
Buy to Open the XBI January 84 Call

The most you can lose on this trade is the premium paid, or $1,100 per call purchased.

The risks I see in this trade are general market and rotation risk. And on that note, it is possible that the recent strength in the market is a classic bear market trap, which could cause the XBI to get hit and our trade to fail.

However, I am encouraged by the action in the stocks that make up the XBI, the market in general, and most importantly the option activity, and am going to add the ETF to the portfolio today.

Position (Original) XBI January 84 Calls
Position StrategyBuy Call
Opened DateAugust 3, 2022
ExpirationJanuary 20, 2023
Net Price10.38
Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.