COI Income Trader Issue: March 11, 2024

Weekly Commentary

Click here to register for the subscriber-exclusive event Wednesday, March 13 at 12 p.m. Eastern Time (ET).

We locked in 5.7% in BITO and 7.8% in GDX last week bringing our total return to 159.2%.

Our GDX position was “called away,” so I plan to start the income cycle over again in GDX by selling some puts early this week.

I plan to add at least one more stock to the portfolio this week, especially if we see the market pullback, which will bring our total to seven stocks. Moreover, I intend to continue to ladder our positions in perpetuity, so we are collecting premium on a weekly basis. As it stands, we have positions due to expire over the next four consecutive weeks.

We continue to be pleased with the overall mechanics of our approach and more importantly the overall returns and steady long-term performance of Income Trader through bearish, bullish, and neutral markets.

Current Positions

Weekly High-Probability Mean Reversion Indicator

Below is my watch list of ETFs and stocks with the most liquid options headed into the week of March 11, 2024.

Here are the various levels I use to determine if an ETF is in an oversold or overbought state.

Each week I also include the current implied volatility (IV) and IV Rank. I look for an IV rank above 40, preferably higher.

ETF Watchlist – Weekly Trade Ideas

Stock Watchlist – Weekly Trade Ideas

Weekly Trade Discussion: Open Positions

Income Wheel Portfolio: Open Positions

Covered Calls: PFE March 22, 2024, 29 Calls
Original trade published on 1-30-2024 (click here to see original alert)

Current Comments: We sold the March 22, 2024, 29 calls for $0.37. At the time of the alert, PFE was trading for 27.38.

Now, with PFE trading for 27.22, the probability of closing at expiration out of the money stands at 88.13%, and the price of the 29 calls sits at roughly $0.10. There are 12 days left in the March 22, 2024, expiration cycle. If we push below $0.05, I plan to buy back our calls and immediately sell more calls.

Selling Puts: BITO March 28, 2024, 28 Puts
Original trade published on 3-5-2024 (click here to see original alert)

Current Comments: We sold the March 15, 2024, 19 puts for $0.87. At the time of the alert, BITO was trading for 20.33.

Now, with BITO trading for 31.80, the probability of closing at expiration out of the money stands at 71.32%, and the price of the 28 puts sits at roughly $0.76. There are 18 days left in the March 28, 2024, expiration cycle. We’ve made over 45% in steady returns since we added BITO to the portfolio.

Selling Puts: DKNG March 28, 2024, 38 Puts
Original trade published on 2-22-2024 (click here to see original alert)

Current Comments: We sold the March 28, 2024, 38 puts for $1.15. At the time of the alert, DKNG was trading for 40.33.

Now, with DKNG trading for 41.74, the probability of closing at expiration out of the money stands at 77.24%, and the price of the 38 puts sits at roughly $0.56. There are 18 days left in the March 28, 2024, expiration cycle. If we see a resumption of a push higher in DKNG this week, I plan to buy back our puts, lock in profits and immediately sell more put premium.

Selling Puts: XLU March 28, 2024, 59.5 Puts
Original trade published on 2-26-2024 (click here to see original alert)

Current Comments: We sold the March 28, 2024, 59.5 puts for $0.72. At the time of the alert, XLU was trading for 60.84.

Now, with XLU trading for 63.75, the probability of closing at expiration out of the money stands at 74.48%, and the price of the 59.5 puts sits at roughly $0.81. There are 18 days left in the March 28, 2024, expiration cycle.

Selling Puts: KO April 5, 2024, 60 Puts
Original trade published on 2-26-2024 (click here to see original alert)

Current Comments: We sold the April 5, 2024, 60 puts for $0.60. At the time of the alert, KO was trading for 61.05.

Now, with KO trading for 59.52, the probability of closing at expiration out of the money stands at 43.44%, and the price of the 60 puts sits at roughly $1.29. There are 26 days left in the April 5, 2024, expiration cycle.

As always, if you have any questions, please do not hesitate to email me at andy@cabotwealth.com.

The next Cabot Options Institute – Income Trader issue will be

published on March 18, 2024.

Copyright © 2024. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.