ProShares Bitcoin ETF (BITO)
In Income Trader, we’ve managed to lock in a return of 40.1% in BITO. Not many can say they’ve made money in BITO, or any other crypto-related asset, since the beginning of June 2022. Just another reason why more and more individual investors are flocking to the tried-and-true, mechanically driven, income wheel approach.
It’s time to bring BITO back into the fray. Today I want to open a new position in BITO by selling puts for the March 15, 2024, expiration cycle at the 19 strike. By doing so, I have the ability to bring in roughly $0.87, or 4.6% over the next 42 days.
BITO is currently trading for 20.33.
Here is the trade:
Sell to Open BITO March 15, 2024, 19 put for $0.87. (As always, prices will vary, please adjust accordingly.)
Delta of short put: 0.35
Probability of Closing Out-of-the-Money: 58.16%
Probability of Touch: 72.25%
Total net credit: $0.87
Max return (cash-secured): 4.6%
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.
As always, if you have any questions, please feel free to email me at andy@cabotwealth.com.
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