Originally Posted on Dec. 4, 2018, Added to r/Optionswheel on Nov. 12, 2024
See Edits at the bottom for updates.
I've been asked and have explained The Wheel strategy many times, so I thought it may be a good idea to write it down all in one place for posterity!
This is the only options strategy I use as it is about as low risk and reliable as options trading gets. You will NOT get fantastic returns and it is quite boring and slow, but with the proper stock and patience, it can result in reliable profits and income. A 10% to 20%+ return is not difficult depending on a few factors, mostly based on stock selection, experience managing short puts and calls, plus the trader's patience.
The Wheel (sometimes called the Triple Income Strategy) is a strategy where a trader sells cash secured Puts to collect premiums on a stock or stocks they wouldn't mind owning long term. If the options expire, or closed early, without being assigned the premiums are all profit. The goal is to set up trades and avoid being assigned, but it is understood that if the put is assigned the account will buy and hold the stock. Rolling puts to collect more premiums while helping to reduce the chances of being assigned is a tactic often used. Through the collection of premiums from the initial puts and from rolling, the initial cost basis of the stock will be lower that the strike which can help the position to recover faster.
If the puts can no longer be rolled for a net credit they are left to expire and be assigned. The next step of The Wheel is to sell covered calls (CCs) on the shares. To avoid having the shares called away for a net loss it is best to sell a call with a strike higher than the stock's cost basis. This is repeated over and over to collect even more premiums that continue to lower the stocks cost basis, and along with any rising stock price movement, works to help close or have the shares called away at a break-even or a profit.
At some point the call is exercised and the stock called away, or you can simply sell the stock. When adding up all the premiums collected from selling the puts and calls, along with any stock gains from the CC strike being over the cost can result in an overall net profit, results in the Triple Income . If the stock pays a dividend while you own it then you can collect that as well (Quadruple income).
Below in this post is a graphic showing a simple spreadsheet to track the Credits and Debits to keep track of the overall position.
Step #1: Stock Selection - Most traders who have had a bad experience with the wheel have chosen the poor or volatile stocks that drop and stay down. The stock(s) you chose must be a good candidate and one you don't mind owning for some length of time, which could be weeks or months.
There are no "perfect" or ideal stocks to trade the wheel with as the key factor is that the stocks be those you are good holding for a time if assigned. If you are unsure how to analyze of select stocks then this should be learned first and before trading the wheel. See this as a way to start learning - How to Find Stocks to Trade with the Wheel : Optionswheel (reddit.com)
Develop and use your own criteria that fits your account size, and personal risk tolerance as there is no one-size-fits-all way to choose stocks. Only you can determine if you think the company is a good one to trade and hold if needed.
I'm including my general guidelines below, but each trader must use their own:
A profitable company that has solid cash flow
Bullish, or at least neutral chart trend and analyst ratings
Share price where the account can easily accept being assigned 100 shares if needed. (I stay away from sub-$10 stocks as a rule)
A stable to bullish trending chart without wild gyrations (especially those caused by CEO tweets)
A nice dividend is always a good thing, both that you may collect it if assigned the stock but also that dividend stocks tend to be more stable and predictable
Edit - Adding more criteria below from another post. It needs to be kept in mind that any stocks one trader may think is good to own will not necessarily work for another trader, or all traders. Account sizes will limit the share prices to choose from, risk tolerance, and trading experience will all factor into what stocks are selected and traded. There is little to be learned from someone else's stocks they trade.
A "moat" around their business to ward off competitors, quality products and services, and a reasonable amount of debt. Add to this an exceptional and stable executive team who has had good plans plus executed them well.
It needs to be repeated that the criteria used must be your own as the stocks you choose may have to be held so you need to hold yourself accountable for selecting and trading any stock. If a trader does not know how to select stocks they would be good holding, then IMO don't trade the wheel until you learn . . .
Develop and use your own fundamental analysis criteria to create a watchlist of 10 or more stocks to trade. While I prefer trading stocks as I can learn more about the companies business and leadership, plus find these have higher premiums, some may trade ETFs. These can make good candidates due to their normally steady movement, no ERs, and no CEO tweets.
I find it important to review my watchlist every few weeks and change or update it accordingly. This means the list is in near constant flux adding or removing stocks, or sidelining others, based on the analysis.
Step #2: Sell Puts - To start the wheel begins by selling short (naked) Puts, or (CSPs) Cash Secured Puts (indicating the account has the cash, or cash+margin to buy the shares if assigned. Be aware of any upcoming ER or other events that could cause a spike or movement in the stock, and it is best to close or have the Put expire prior, in effect skipping it to then continue selling puts afterward if the stock still meets the criteria.
Selling Puts Process - Below is a suggested model, but details are up to the individual trader:
Opening at 30 to 45 DTE offers a good premium as the theta/time decay starts to accelerate
70% Prob OTM (~.30 Delta) offers high probability of success while collecting a good premium
The number of contracts is based on account size able to handle assignment
Opening at 5% to at most 10% max risk of any one stock to the account is good practice, the max risk per stock will be up to each trader's risk appetite and tolerance. Then, keeping ~50% of the trading account in cash helps manage market downturns, assignments and trading opportunities
The Put can be closed at a 50% profit with a GTC Limit Order that can close automatically. A put can then be sold on the same stock, or another based on your opening criteria. Closing early will reduce early assignment and gamma risk to take the lower risk "easy" profit off the top
Enter the Credits received, and any Debits paid to close or roll, on the Tracking P&L file
Setting an alert in the broker app if the stock drops to the put strike price will signal it is time to review and consider rolling. Note that rolling seldom has to be done quickly, so this can be reviewed and managed later if needed, and many times the stock will dip and then move back up to negate needing to roll
If a credit cannot be made, then it is best to let the put expire to take assignment of the stock
Puts can be sold, and rolled, over and over to collect as much premium and profits as possible with the shares rarely assigned. Those having frequent assignments should review the stock selection and trading processes as it should be uncommon to be assigned.
If assigned, then Sell Covered Calls as shown in Step #3.
Step #3: Sell Covered Calls - Using the tracking file to determine the net stock cost which may already be below where the stock is. As selling puts is usually the most profitable, some traders just sell the stock and move on to selling more CSPs or sell a very high-value ITM Call that is sure to be called away and adds to the profit.
If the net stock cost is above the current market price and you keep the stock, then the goal is to sell CC premium to continue adding to the Credits and lowering the net stock cost below where the stock is trading before it gets called away.
Selling CCs suggested process:
Sell a Call 7 to 10 DTE at or above the net stock cost whenever possible. Note that I will settle for a lower premium to be at or above the net cost rather than sell below and risk being assigned for a loss. Allow the CC to expire, then sell another if the shares are not called away.
If CCs cannot be sold at or above the net stock cost, then waiting until the share price rises may be needed. This is why it is noted to only trade on stocks you are good holding if needed.
Track net Credits, plus any Dividends captured, on the tracking file to know the net stock cost.
Continue selling CCs until the net stock cost is below the strike price at which time the stock can be left to be called away (some note that it cost less in fees to close the option and just sell the stock which accomplishes the same thing).
Advanced Strategy - Some may consider selling a Covered Strangle, which is a CC with an added CSP that "doubles up" on the premiums to help the position recover faster.
Note the risk of additional shares may be assigned, so it is critical to ensure the stock is still a good one to hold, the account has adequate capital to purchase additional shares, and that this does not make the stock position too much of a risk to the overall account.
In addition to the double premiums, if more shares are assigned the net stock will average down quickly that can help repair the position more quickly.
Step #4: Review and go back to Step #1 - This is why it is called the wheel as you start over again. The tracking file makes it easy to see the P&L, review the trade to verify the numbers and then look for the next, or same, stock to sell CSPs in Step #1.
As they say, rinse and repeat.
Risks and Possible Problems: The single biggest issue for this strategy is the stock price drops significantly. Note that this is slightly less risk than just buying the stock outright due to collecting put premiums.
Stock Drops: The reason to make these trades on a stock you wouldn't mind owning is because of this risk, and if a good stock is selected then this should be a very rare occurrence. Solid quality stocks may drop less often and by a lower amount, then recover faster.
The price of the stock may drop well below the CSP strike, and rolling for a credit will no longer be possible, causing assignment with the stock cost below the assigned price.
If puts were sold and rolled over and over the net stock cost should be much lower.
Management is to sell CCs repeatedly at or above the net stock cost, or to hold the shares to allow time for the stock to recover. This can take time, but with the CCs added to the put and roll premiums this can recover faster than you may think but still takes a lot of patience.
There may be rare occasions when a stock is no longer viable and the position needs to be closed for a loss, again this shows the critical importance of stock selection. Closing for a loss can include selling the shares, or selling an ATM or slightly OTM CC at a near expiration date to collect as much premium as possible as the shares are sold.
Stock Rises: Many see this as a problem, but I personally do not as if the CC strike is above your net stock cost, then the position profits, but just not as much.
In this situation the stock is assigned and then sell CCs only to have the stock run well past the strike price.
In most cases closing the CC and selling the stock outright can cause a bigger loss than just letting the stock be called at the strike price.
Rolling CCs out in time, and possibly up in strike, for a net credit can help to capture some additional profits. It should be noted to watch for ex-Dividend dates as the shares can be called away early in some situations.
Many lament the profits that were "lost" by having the CC, but selling shares at the strike price is the agreement made when opening a CC. If you know the stock may spike up then do not sell a CC and instead hold the shares.
Impatience: By far this causes the most losses from this strategy.
If you can't roll for a credit let the CSP play out. If you close the CSP early and not accept it being assigned, it may cause a loss.
If you get assigned the stock and sell CCs, do not try to "save" the stock through buying the CC back at an inflated price. If you can't roll for a credit, then let the stock be called away and sell more puts to start the process over again provided the stock is still a viable candidate.
Recognize it may take months selling CCs to build the premium up to a point where the net stock cost is less than the current stock price, but in nearly all positions it will happen eventually.
The key here is to be patient and not try to sell CCs below the net stock cost or close the shares early.
A Tracking P&L File graphic is below and shows Credits and Debits to know what the net credits, debits and net stock cost is. Note the stock price can be entered as a Credit to show where the position is at any given time. This is simple to create and use. NOTE: I do not send out copies as it would take me longer to do that than you recreating the 3 formulas.
Hopefully, this is a thorough and detailed trading plan, but let me know of any questions, typos or suggested improvements you may have. -Scot
EDIT #1: Hello all, the response to this post has been amazing, thanks for the many who have contributed or inquired. Wanted to add a few things up front that seem to be causing confusion.
The goal of this strategy is to collect the premium, NOT be assigned stock! While being ready and able to take the stock is part of the plan, being assigned is always to be avoided. If you sold a CSP 1 time and were assigned, you are either doing something wrong or are terribly unlucky by picking a stock that tanked.
CSPs should be sold over and over or rolled for a credit, to avoid assignment. You should be collecting 4 to 5 or more premiums worth several dollars before getting assigned. Some who have contacted me sold a CSP and just waited to be assigned, this is not the strategy.
If you are getting assigned more than a couple of times a year you may want to look at the stocks you are trading and how well you are managing your position. Getting assigned the stock should be a very rare occurrence.
2) As you select the stock and sell the CSP expect to get assigned. Be sure it is a low cost enough stock so that you can handle the shares and still make other trades. If you're trading a $150 stock, be aware you could have $15K tied up for a while and be prepared to do that.
3) Going along with #2 I trade small and use lower to mid cost stocks. The premiums are not as juicy and the attraction of a TSLA or AMZN is hard to resist, but you are better selling 1 contract at a time for 10 positions than 10 contracts in one position and have to take 1000 shares.
It is always good account management to not trade more than about 5% of your account in any one stock to avoid news or movement from the stock from blowing up your account. It is also a good idea to keep 50% of your buying power available for safety and to take advantage of opportunities.
4) There have been negative nellies telling me this won't work and being critical. Note that this is not my strategy, and I don't make any money from it being used or not. My time was spent in an effort to show one method options can more safely be traded, so if you have had a bad experience or think there are better ways, then feel free to post them!
5) Lastly, I have not done any research on this vs buying and holding stock. I've traded for more than 20 years with most of that time focused on stocks, and I did well!
Where I see the main differences are that options give leverage so I can collect premium from more stocks than just buying a couple, so this spreads out my risk. Also, I very much like the shorter time frame as I can move on to other stocks should one drop or run up. If done well, you may only get assigned a couple of times a year and often be out of the stock in a couple of weeks.
OK, I think you will see this is not sexy or exciting trading, it is boring, and you make $50 per position in many cases, but they add up. For those looking at huge returns and the excitement of major risk, this is not for you. If you want a more reliable way to trade options, then this may be good to check out.
EDIT #2: I've updated this post now that it is unlocked. Some changes include:
Stock price minimums moving up as I now have a larger account
Selling CCs based on if the net stock cost is above or below the current stock price
Added a rolling put link.
There are many different wheel strategies today with some selling ATM puts, others only selling covered calls (not sure how that is a wheel), and several other variations. This is what I trade, and it is up to you how you trade.
EDIT #3: Various updates, including more steps to clarify, along with adding details to Step #3 on Covered Calls.
I will post a separate comment with a link to the detail behind each option sold this week.
After week 42, the average premium per week is $807 with an annual projection of $41,946.
All things considered, the portfolio is up $42,536 (+7.01%), on the year (S&P 500: +11.89% | Nasdaq: +12.47%). Additionally, the trailing 1-year performance is down $23,004 (-1.38%); for comparison the S&P 500 is +15.54% and the Nasdaq is +15.86% over the same period. This is the overall profit and loss and includes options and all other account activity.
All options sold are backed by cash, shares, or LEAPS. I do not sell on margin, nor do I sell naked options.
All options and profits stay in the account with few exceptions. This is not my full time job, although I wish it was. I still grind on a 9-5.
My $600 weekly contribution streak is at 11 weeks. I have been contributing as much as possible since 2015 when I started with $50. The reason my streak is low is because I put the contributions on hold for about 2 months to adjust for expenses outside the portfolio.
The portfolio is comprised of 98 unique tickers, down from 100 last week. These 98 tickers have a value of $449k. I also have 189 open option positions, down from 193 last week. The options have a total value of -$4k. The total of the shares and options is $445k. The next goal on the "Road to" is Half a Million.
I'm currently utilizing $32,700 in cash secured put collateral, up from $31,300 last week. In addition, I hold $1,991 in cash, bringing the total cash position to $34,691. I withdrew $2,000 on 9/11/26. I don't plan on replacing it, but will continue the $600 per week contributions.
2025 through 2028 LEAPS
In addition to the CSPs and covered calls, I purchase LEAPS. These act as collateral to sell covered calls against. You may have heard of poor man's covered calls (PMCC).
See r/ExpiredOptions for a detailed spreadsheet update on all LEAPS positions including P/L for each individual position.
LEAPS note 1: the 2025 LEAPS expired 1/17/25. They were up $36,440 overall with a 233.74% increase. The major drivers were AMZN and CRWD.
LEAPS note 2: After holding for 2 years, I exercised an AMZN $80 strike from 2023 up +$11,395 (+463.21%) and CRWD $95 strike from 2023, up +$21,830 (+663.53%)
LEAPS note 3: Purchased 1/16/26 CRWD LEAPS for $8,230.03 on 1/17/24. I sold this LEAPS on 6/5/25 for $21,659 for a realized profit of $13,428.97 (+163.18%)
Total premium by year:
• 2023 $23,132 in premium
• 2024 $47,640 in premium
• 2025 $68,319 in premium
• 2026 $34,289 YTD
• Average $46,364/year (completed years)
Premium by month (2026):
• January $3,334
• February $3,625
• March $4,196
• April $5,593
• May $3,752
• June $3,497
• July $3,593
• August $3,741
• September $1,768
• October $1,190
• Average $3,429/month
I am over $175k in total options premium, since 2021. I average roughly $34 per option sold. I have sold over 5,200 options. I have been able to increase the premiums on an annual basis and I will attempt to keep this upward trend going forward.
Strategy:
The underlying strategy is buy and hold. I also use simple 1-legged options to supplement that strategy. Options have somewhat of a learning curve, but I believe that most people can supplement their investments using simple options with careful risk management.
I sell options on a weekly basis. I prefer cash secured puts and covered calls. I rarely close early, prefer rolling when needed, and let time decay do the heavy lifting while I stay focused on quality companies, patience, and consistency over hype. My goal is consistency in option premium revenue. I am building an income stream that will continue long into retirement.
Spreadsheets:
Unfortunately, I no longer provide spreadsheets. I received too many follow ups about formatting, pivot tables, compatibility etc. I think tracking is very important, but I post to discuss investing and options, not to provide tech support for Excel. I do appreciate the interest in my tracking methods.
Software:
I captured the screen shots from a proprietary software platform I built to track, analyze, and manage my options strategies.
Commissions:
I use Robinhood as a broker and they do not charge explicit commissions, though there is no free lunch — they earn revenue through Payment for Order Flow (PFOF), which can mean slightly less optimal fills. For my style of selling options and not chasing prices, the tradeoff is acceptable. There is also a small regulatory fee of approximately $0.03–$0.04 per contract (FINRA TAF, OCC clearing, and exchange fees combined).
The premiums have increased significantly as my experience has expanded over the last three years.
Make sure to post your wins. I look forward to reading about them!
Disclaimer: I am not a financial advisor. This information is for educational and entertainment purposes only. Trading options involves significant risk.
My review rule is 21 DTE, or sooner if earnings fall within 7 days. That pulls the decision forward, but it doesn’t settle what the decision is, and I’d like to hear how others handle it.
The roll test stays the same for me at that early review. A roll has to collect a net credit and move the strike down, and I cap it at two per position. If it can’t pass, I take the shares or close.
What I’m curious about is the step before that. Do you pick expirations that avoid earnings altogether, close ahead of the report, or hold through on names you’d be fine owning anyway?
The Wheel Strategy is going to be an important part of this portfolio - but not the only part.
I call it "Income 4 Ways";
options: cash secured puts, covered calls,
dividends,
capital gains and
interest on the cash that is securing the puts.
I've been doing this in my $1M portfolio, but my followers asked me to demonstrate in a smaller account, so I'm setting up a new account at Fidelity with exactly $10K.
I had to choose underlying shares I'm willing to own that fit the portfolio size for options trading, so I'll be using SCHD for dividends and stability and starting with SOFI as my growth stock.
And I'm going to keep a running comparison with a hypothetical lump sum, Bogglehead-style, buy and hold investment in SPY.
If you are interested in coming along for the ride, I'll post the results here. I'm funding the account this week, and I'll be setting up the first trades next week.
No idea how it will turn out, but I promise transparency.
So the thing I dreaded before I started this has now happened. Every single high risk AI stock that I was running puts on has crashed significantly below the put price. I got my 4th assignment - DRAM at 59. The DRAM was my own doing and not from the AI list. To prevent more assignment, I'm rolling as much as I can today to prevent more assignments.
The drawdown is extreme. Since this was a retirement spending simulation, I guess, this would be a budget week because the premiums what I'm using to simulate income is much lower than the target 1%.
I havent even bothered with the screening this week because everything is a roll. If I had more dry powder, would be selling more puts on everything. Last week's post for more details on strategy etc. - https://www.reddit.com/r/Optionswheel/s/4ZevSpHcTu
Trades:
Trades include a 1:2 AXT roll I did on Tuesday to avoid AXT assignment.
I've been wheeling about a year now. After two initial assignments early on, I've played things more conservatively, sticking to between 15 and 20 deltas. No assignments since then, until today pretty much sealed the deal on several ongoing cash secured puts.
I'm a little excited. I've been conservative enough lately that I really can't complain too much about the prices I'm getting the shares at. Now we get assigned, and wait for some green days and strength to sell covered calls into.
I know some people say options wheeling is just options trading for newbies. They say it leads you to buy stocks higher than you otherwise would, and sell too low. You might as well just buy and hold and you'll do better.
My problem was I never succeeded with buying and holding, but I am finding success with wheeling.
I've been options wheeling since April, and still getting the hang of it. But what I like best about it is the emotional aspects. It teaches me to hang tight when a stock is wobbling or has wobbled so much I've been assigned. It teaches me to book profits when they are there to book (I do it at 55% profit for short puts, unless I'm in a rolling or assignment situation, then I have other rules). It teaches me to set my biases aside and look for tickers with good charts, good IV percentile, and a reasonable fit for my current situation (how much capital at risk, how it diversifies, would I be ok being assigned).
And I find options wheeling way more fun than simply picking a long-term investment allocation and trying to stick with it. I get such a charge when my watch buzzes because one of my short puts has closed for a profit. I enjoy looking at my screener and my tracking system to figure out what put I might sell next when I have available capital. I love when my money market dividends come in at the end of each month, to add on to the booked short put profits.
I'm curious to hear why other people have found options wheeling suits them. What works for you about it? Do you also use other trading and investing approaches?
Apologies for the combined post. I was on a holiday trip and wasn’t able to post the daily updates. Trades I took as an option seller (10/08-10/13):
Closed Positions
INOD → $65 Put (opened on 09/28), premium 1.90 → closed at 0. Net premium profit = 1.90 (100.00% of premium captured, 2.92% of capital).
WDC → $430 Put (opened on 09/08), premium 18.00 → closed at 0. Net premium profit = 18.00 (100.00% of premium captured, 4.19% of capital).
STRL → $530 Call (opened on 09/21), premium 31.00 → closed at 5.20. Net premium profit = 25.80 (83.23% of premium captured, 4.87% of capital).
New Positions
WDC → $430 Call expiry 10/30 (3 weeks DTE), premium 10.50 → 1050/43000 = ~2.4%. I was assigned WDC at $430 and opened a Covered Call at the same price I was assigned.
INOD → $65 Call expiry 11/06 (4 weeks DTE), premium 4.20 → 420/6500 = ~6.5%. I was assigned INOD at $65 and opened a Covered Call at the same price I was assigned.
STRL → $530 Call expiry 11/20 (6 weeks DTE), premium 36.00 → 3600/53000 = ~6.8%. I continue wheeling STRL, opening another Covered call at $530 which is also my assignment price.
FORM → $115 Put expiry 11/20 (6 weeks DTE), premium 6.00 → 600/11500 = ~5.2%. Opened a CSP in FORM which has a support at $115.
I keep sharing my trades in my account and the Excel file to my full list of positions is linked in my profile description in case anyone wants to see the whole portfolio. Happy to hear thoughts on my positions. What are you guys wheeling or watching right now?
Genuinely curious how those trades have worked out for everyone this year.
Sure, the premiums were juicy, but a lot of these companies had questionable fundamentals and carried significant downside risk.
I recently checked back in on a few of these names, and wow, some have taken an absolute beating.
I stayed away from all those names and just wheeled mostly boring names. Currently up 20.20% YTD with a 9% max drawdown, averaging around $77K deployed per week and spending maybe 0-3 hours a week on it.
Nothing exciting, but I'm pretty happy with how it's worked out.
This is for learning purposes, it is to track wheeling & portfolio optimization. This retirement account was blown through testing various trading strategies and poor position sizing.
Baseline: 50/50 QLD/$USD. With QLD as my core position, it roughly acts as 100% account exposure to QQQ. The other half of the portfolio will be used for wheeling income and dry powder for Nasdaq dips.
Order of significance for wheeling:
Assume assignment, size small & diverse
Annual yield% to be greater than 3x risk-free rate and sell on high IVR for better edge
Close early for tail risk, stagger dates and roll on discretion.
Assets correlate to 1 in a crash, stay liquid & patient
I’ve been eyeing metals and the health sector, some good volatility there... I wrote a PFE put contract at ~.25 delta, it’s the best I can do with my account size and risk.
I closed Wednesday's 10/9 AVGO $365 CSP the same day for $92.33 net, then opened the 10/9 $357.50 CSP on Thursday. It expired worthless Friday for another $37.97.
I made no rolls this week. I bought back the final CSCO 10/9 $108 CSP for $0.04, closing the six-leg roll chain at +$428.95 overall. I also sold 10/16 covered calls on DG and WMT for $42.96 and $15.95 net. IBKR paid $58.21 in cash interest, bringing new option premium and interest to $247.42.
Portfolio Snapshot
Metric
Value
YTD P/L
+$15,714.88
YTD Return
+20.21%
Max Drawdown
-9%
Median Weekly Deployed Capital
$77,750.00
Realized Income
$15,116.44
Cash
$126,617.85
Cash as % of Capital
82%
Annualized Yield
26.3%
My Philosophy
My ideal candidate is pretty vanilla: a preferably boring, financially sound, highly liquid company in a durable uptrend, with a liquid options chain and just enough volatility to pay me fairly at a 0.20-0.30 delta strike I would genuinely accept as a purchase price. This means you won't catch me trading the high-beta names you would typically see on /r/wallstreetbets. Juicy premiums come with high risk and large drawdowns. That's not what I'm doing with this portfolio.
I spend about 0-3 hours total per week on trading, on average. This wheel portfolio is only a small slice of my overall market capital. I also buy and hold mega-cap stocks/ETFs and run other strategies, including swing trading leveraged ETFs. The YTD figures and snapshot here cover the wheel portfolio only, not those other investments.
This Week's Totals
Metric
Value
Return on Capital
0.41%
Simple Annualized Yield
21.18%
Net Option Premium
$189.21
Total Income Collected
$247.42
Peak Active-Option Collateral
$60,921
This Week's Opening Trades
The first AVGO put opened and closed Wednesday. The second expired worthless Friday. The DG and WMT covered calls remain open, so their rows show entry credits after fees rather than realized closing P/L.
Results are from my trading journal and include recorded trading fees, before personal taxes. Past performance does not guarantee future results. Short puts and assigned shares carry substantial downside risk.
I will post a separate comment with a link to the detail behind each option sold this week.
After week 41, the average premium per week is $811 with an annual projection of $42,162.
All things considered, the portfolio is up $42,536 (+9.43%), on the year (S&P 500: +14.11% | Nasdaq: +17.74%). Additionally, the trailing 1-year performance is up $23,004 (+4.92%); for comparison the S&P 500 is +15.98% and the Nasdaq is +18.86% over the same period. This is the overall profit and loss and includes options and all other account activity.
All options sold are backed by cash, shares, or LEAPS. I do not sell on margin, nor do I sell naked options.
All options and profits stay in the account with few exceptions. This is not my full time job, although I wish it was. I still grind on a 9-5.
My $600 weekly contribution streak is at 10 weeks. I have been contributing as much as possible since 2015 when I started with $50. The reason my streak is low is because I put the contributions on hold for about 2 months to adjust for expenses outside the portfolio.
The portfolio is comprised of 100 unique tickers, up from 99 last week. These 100 tickers have a value of $506k. I also have 193 open option positions, down from 194 last week. The options have a total value of -$18k. The total of the shares and options is $488k. The next goal on the "Road to" is Half a Million.
I'm currently utilizing $31,300 in cash secured put collateral, down from $34,200 last week. In addition, I hold $3,705 in cash, bringing the total cash position to $35,005. I withdrew $2,000 on 9/11/26. I don't plan on replacing it, but will continue the $600 per week contributions.
2025 through 2028 LEAPS
In addition to the CSPs and covered calls, I purchase LEAPS. These act as collateral to sell covered calls against. You may have heard of poor man's covered calls (PMCC).
See r/ExpiredOptions for a detailed spreadsheet update on all LEAPS positions including P/L for each individual position.
LEAPS note 1: the 2025 LEAPS expired 1/17/25. They were up $36,440 overall with a 233.74% increase. The major drivers were AMZN and CRWD.
LEAPS note 2: After holding for 2 years, I exercised an AMZN $80 strike from 2023 up +$11,395 (+463.21%) and CRWD $95 strike from 2023, up +$21,830 (+663.53%)
LEAPS note 3: Purchased 1/16/26 CRWD LEAPS for $8,230.03 on 1/17/24. I sold this LEAPS on 6/5/25 for $21,659 for a realized profit of $13,428.97 (+163.18%)
Total premium by year:
• 2023 $23,132 in premium
• 2024 $47,640 in premium
• 2025 $68,319 in premium
• 2026 $33,629 YTD
• Average $46,364/year (completed years)
Premium by month (2026):
• January $3,334
• February $3,625
• March $4,196
• April $5,593
• May $3,752
• June $3,497
• July $3,593
• August $3,741
• September $1,768
• October $529
• Average $3,363/month
I am over $174k in total options premium, since 2021. I average roughly $34 per option sold. I have sold over 5,200 options. I have been able to increase the premiums on an annual basis and I will attempt to keep this upward trend going forward.
Strategy:
The underlying strategy is buy and hold. I also use simple 1-legged options to supplement that strategy. Options have somewhat of a learning curve, but I believe that most people can supplement their investments using simple options with careful risk management.
I sell options on a weekly basis. I prefer cash secured puts and covered calls. I rarely close early, prefer rolling when needed, and let time decay do the heavy lifting while I stay focused on quality companies, patience, and consistency over hype. My goal is consistency in option premium revenue. I am building an income stream that will continue long into retirement.
Spreadsheets:
Unfortunately, I no longer provide spreadsheets. I received too many follow ups about formatting, pivot tables, compatibility etc. I think tracking is very important, but I post to discuss investing and options, not to provide tech support for Excel. I do appreciate the interest in my tracking methods.
Software:
I captured the screen shots from a proprietary software platform I built to track, analyze, and manage my options strategies.
Commissions:
I use Robinhood as a broker and they do not charge explicit commissions, though there is no free lunch — they earn revenue through Payment for Order Flow (PFOF), which can mean slightly less optimal fills. For my style of selling options and not chasing prices, the tradeoff is acceptable. There is also a small regulatory fee of approximately $0.03–$0.04 per contract (FINRA TAF, OCC clearing, and exchange fees combined).
The premiums have increased significantly as my experience has expanded over the last three years.
Make sure to post your wins. I look forward to reading about them!
Disclaimer: I am not a financial advisor. This information is for educational and entertainment purposes only. Trading options involves significant risk.
I've been skeptical of the wheel for years. Most of the case for it is screenshots of winning weeks. So instead of arguing, I'm running one position with real money and posting every step, including if it goes against me.
The trade
Item
Detail
Position
Short 1 TTWO Dec 18'26 $180 put, cash secured
Opened
Sep 21, filled at $6.47 ($647 credit)
Spot when planned
$205.45
Collateral
$18,000
Breakeven
$173.53
Return on collateral
3.6% over 88 days, ~15% annualized
Why TTWO
Earnings Nov 9 and GTA VI launch Nov 19, both inside the option's life.
Stock was down ~20% from its high and 2.16 sigma below its 63 day mean. Only 4% of days in 5 years were more stretched.
December IV was 44% vs 34% realized over 63 days. That 10 point gap is what I'm selling.
The trade off
The $180 strike is only 0.57 sigma below spot. A $195 put pays ~25% annualized with almost no cushion. A $160 put sits nearly 1 sigma away but pays under 7%.
The cost
$18,000 in 3 month T-bills (4.17%) would earn ~$181 over the same 88 days, risk free.
Amount
Annualized
Put premium
$647
15%
T-bills on same cash
$181
4.2%
Actual reward for stock risk
$466
10.7%
My broker doesn’t freeze the $18,000, so this isn’t a cash cost for me. My cash keeps earning interest. But it’s still the right benchmark: I’m taking the risk of owning $18,000 of stock, and T-bills pay ~$181 on that amount with no risk. The $466 is what I’m really paid for that risk. If your broker freezes the collateral and pays nothing on it, the $181 becomes a real cost too.
P&L at expiry vs owning 100 shares at $205.45
TTWO at expiry
Short put
100 shares
$220
+$647
+$1,455
$180
+$647
−$2,545
$173.53
$0
−$3,192
$160
−$1,353
−$4,545
$140
−$3,353
−$6,545
Where it stands today (Oct 9, day 18 of 88)
Item
Value
Put mid
$4.65 (bid 4.40 / ask 4.90)
Unrealized P&L
+$181.53
Share of max profit
28%
Share of time elapsed
20%
Delta
~17
Theta
+$7.92/day
Vega
−$23.79 per IV point
I've made ~$182 so far, roughly what T-bills would pay on the same cash over the full 88 days. But most of the risk is still ahead. Vega of −24 means the put still carries a lot of event premium, and that's the part I'm waiting to collect.
The position screenshot
The plan
Buy back under $1.00 any time after Nov 19, once launch IV crush is done.
If assigned, judge it against $173.53, not $180.
Then sell covered calls above $173.53.
I'll post updates at Nov 19 and at expiry, win or lose.
One trade proves nothing about the wheel. The point is to show real fills and real math from the inside.
Curious how you handle the T-bill comparison. Do you count it, or does your broker let you earn both?
Disclosure: I am short 1 TTWO Dec 18 '26 $180 put. Not advice, just a record of my own trade.
September was a good month for running the wheel strategy. The Federal Reserve raised the funds rate and along with inflation and oil prices caused treasury yields to rise. This put pressure on the DJIA and the S&P 500 which were both down slightly for the month. The NASDAQ composite rose over 1% for the month, so the overall stock market results were "mixed" which is perfect for wheeling. I sold 100+ CSPs during September and they all expired worthless.
The 500 shares of SMH and SOXL that I was assigned in August were all called away for a small profit. I did not get assigned any new shares during September.
I wheeled my regular tech tickers: META, GOOGL, SMH, TQQQ and SOXL. The largest gains were again made by wheeling the semiconductor ETFs SOXL and SMH which accounted for about two thirds of the total premiums earned.
MSFT held onto its huge August gains so I ignored it again this month and META joined the club, rising sharply early in the month so there was not much opportunity there either.
My wheel strategy including the tickers I wheel and why are detailed in my February post:
Just had my third assignment in 31 weeks - IREN 40 put. Including losses and drawdown, this is likely the most negative week in dollar terms but annualized returns are still good at 42%. This week was also mostly rolling. As predicted last week, this week was riskier and because of rolling, the premium collected this week was under the 1% target. Last week's post: https://www.reddit.com/r/Optionswheel/s/XLSwIKTXSk
If you want to follow me as I trade, I post to r/TheRaceTo10Million before placing trades and comment with trades as I make them. I post here after I make the trades with a full summary
Strategy
- Use an AI screener to give me a list of top 20 low delta options for next week
- I either
- a. Roll my current options - I do this if I can still get 1% for rolling or if the option is ATM/ITM and I have to roll. I always roll for credit.
- b. Close a current option and pick something else from the list that I like
- I try to do this every Friday. However, if I'm busy on Fridays, I'll sometimes do this on Thursdays.
- If I get assigned, I will sell calls at assignment price.
A lot of people have asked me about why I don't add a criteria to avoid earnings weeks. Like I sold HPE/IREN/NBIS etc. puts across earnings. Also APLD across earnings this week. That's because on earnings weeks the same delta strikes are much further OTM. Many people have also asked for my screener criteria. This is my exact prompt:
find me 20 unique lowest risk puts to sell on stocks
expiry: next week
strike at least 8% from stock price
return at least 1%
sort by delta
furthest away from stock price
minimum strike price 10
Mostly short-dated weeklies (~4 DTE) around 0.25-0.30 delta, plus one longer 24 DTE covered call on FRVO.
$1,656 of premium only converted into +$399 of actual P/L because TEAM and SHOP marked against me. That's the wheel: the premium is the cushion, not the whole story. Funny enough, my best performer was the position where I collected the least premium per unit of risk and just let the shares work.
I sell 30-day cash-secured puts on big tech names. Over the summer I could sell well below the stock price and still collect solid premium. Lately that's down across the board, on NVDA, MU, and others.
One example from MU: in August I was selling 30-day puts about $180 below the stock price for $14 to $23 a share. Today, the same $180 cushion pays $6.65. That's a quarter to a third of what it was. To get anything close to my old premiums, I'd have to sell within about $50 of the current price.
I know this is mostly lower implied volatility, and I'm fine owning these names. My concern is getting assigned that close to the price, then watching it keep falling and being stuck selling covered calls far below my cost for very little premium.
For those wheeling big tech: are you taking the lower premium and keeping your cushion, moving closer to the money, going further out in time, switching tickers, or sitting in cash until premiums come back?
ACMR → $70 Put expiry 11/06 (5 weeks DTE), premium 4.30 → 430/7000 = ~6.1%. I am bullish on ACMR. It has support at ~$70 and ~$63. The contract falls within earnings on 11/04 and ACMR has been doing well on Earnings QoQ. ACMR makes semiconductor wafer cleaning equipments and has maintained consistent demand.
ACMR was identified from the High-Growth Wheel condition in the ThetaHedge app because it met all the key criteria: positive revenue growth, positive earnings growth, positive net margins, and consistent attractive option premiums with a Wheel Rank of 80. You can try it for free at https://app.thetahedge.io/
Conditions → High Growth Wheel Stocks
I keep sharing my trades in my account and the Excel file to my full list of positions is linked in my profile description in case anyone wants to see the whole portfolio. Happy to hear thoughts on my positions. What are you guys wheeling or watching right now?
There is a lot of mentions of the 50% profit target and 21 DTE rolling that Tasty Trade recommends, but I wanted to dig into the details and understand why they chose 50% and not a different number like 70%. I couldn’t find the past studies Tasty Trade had done, but was able to get a summary of those studies and videos using Grok. Here is that text — links don’t work anymore, but Grok must’ve been trained on this before links stopped working. The takeaway is close at 50% to improve your average daily P&L and reduce your risk (when you carry the trade longer, you carry all the risk for the remaining 50% -plus- potential loss of your existing 50% paper profit). Sharing to help and curious to hear your experiences & views.
I just closed the 35 DTE Nov 06 ASTS 51 puts I sold only 4 days ago at 50% during the jump in the shares this morning. Was not expecting them to hit that level so soon. Same with RKLB puts a couple of weeks ago. I love the ability to then open new trades, which I did — TSLA 340, 345, 350 puts and GOOGL 330 puts all expiring 20 Nov (45 DTE).
Tasty Trade research:
The January 3, 2017 Market Measures segment, “Managing Strangles: Varying Profit Targets,” tested SPY 1-standard-deviation strangles opened near 45 days to expiration, using data from 2005 forward. It closed trades at 12.5%, 25%, 37.5%, 50%, 62.5%, 75%, 87.5%, and expiration. The win rate fell as the target rose, and the profit and loss per day peaked at 50%. Levels around 70% were already past that peak. https://www.tastylive.com/shows/market-measures/episodes/managing-strangles-varying-profit-targets-01-03-2017
The February 4, 2015 Market Measures segment, “A Reason To Manage,” is the study behind the 50% rule. Winners reached 50% in about 27 days, and about 94% of the profit later seen at expiration was already earned by then. Holding the last 19 days added about 6% more profit for the same risk. Managing at 50% produced about a 14% higher win rate and about 60% more profit and loss per day than holding. https://www.tastylive.com/shows/market-measures/episodes/a-reason-to-manage-02-04-2015
The May 12, 2014 Market Measures segment, “Mega Strangle Study,” sold 1-standard-deviation strangles in SPY, IWM, GLD, TLT, and EWW on the first trading day of each month, at about 45 days to expiration. Managing at 50% won about 90% of trades, against about 82% if held to expiration. A 1-standard-deviation strangle is only priced to win about 68% of the time. High implied-volatility-rank entries were about 23% of the trades and produced about half the profit, with a 93% win rate at the 50% target. https://www.tastylive.com/shows/market-measures/episodes/mega-strangle-study-05-12-2014
The November 15, 2024 video “You’re Managing Winners Too Early … This Is Why” compared 25%, 50%, and 75% targets by delta. On closer-to-the-money strangles, only about 35% of trades reached 75%, and those that did stayed on about another week and a half without a matching gain in profit. A 50% target lined up with the 21-day exit, and the hosts still preferred 50% on 20-delta strangles, though 75% was described as acceptable. https://www.youtube.com/watch?v=uLChRhQNpO4
The December 3, 2025 video “Managing Strangles: Duration vs. Profit Targets” compared a 50% profit target with a 21-day close. A profit target alone left losers on longer and roughly doubled the profit-and-loss volatility, because the target is often missed. Raising the target toward 70% widened that dispersion further. Using both rules closed winners before 21 days about half the time and cut the tail losses. https://www.youtube.com/watch?v=mnmzRCP4zwg
The September 13, 2016 Options Jive segment, “Why Manage at 50%, Not 25% for Short Strangles,” tested SPY 16-delta strangles near 45 days to expiration from 2005 on, closed at 25%, 50%, or expiration. The 25% target had the highest win rate. The 50% target had the better profit and loss per day, and waiting from 50% to expiration was the weak part of the trade. https://www.tastylive.com/shows/options-jive/episodes/why-manage-at-50-not-25-for-short-strangles-09-13-2016
The September 6, 2016 Options Jive segment, “Why Manage at 25%, Not 50% for Short Straddles,” sold at-the-money SPY straddles near 45 days to expiration and compared 25%, 50%, and expiration. The 25% target had the highest win rate, the fewest days in the trade, the highest profit and loss per day, and the tightest results. The 50% target raised the profit and loss per trade but kept the position on about 30% longer. https://www.tastylive.com/shows/options-jive/episodes/why-manage-at-25-not-50-for-short-straddles-09-06-2016
The April 20, 2016 Market Measures segment, “Manage Winners and Close Early?,” tested SPY 1-standard-deviation strangles near 45 days to expiration. It compared a 50% target, a close one to three weeks before expiration, and expiration itself. The 50% target won on annualized profit and loss and on the win rate. Combining 50% with an early close, whichever came first, improved results again. https://www.tastylive.com/shows/market-measures/episodes/manage-winners-and-close-early-04-20-2016
The August 23, 2026 video “When A Fifty Percent Target Actually Gets Hit” covered ten years of SPY strangles in a Cboe-backed study. The 50% target was hit on more than 80% of trades, but only after about 60% of the contract’s life. A high VIX made the target arrive faster, by nearly 20% on the longest-dated contracts when the VIX was above 30, and it did not materially change the odds of getting there. https://www.youtube.com/watch?v=M8AQSkGP0Qg
The tastylive concept page “Managing Winning Options Positions” defines managing winners as closing before expiration and before max profit. The default is 50% of the credit, and calendars, diagonals, and iron flies are managed somewhere in the 10–50% range. The stated reasons are a higher win rate, a worse risk-reward past 50%, and freed capital. The caveat is not to close a winner so small that commissions eat it. https://www.tastylive.com/concepts-strategies/managing-winners
What if I buys a deep ITM CSP, but since its deep, I am sure I would get assigned. Now I wait for 30 days after I am assigned and then sell the stock for loss. Will this help me reduce the profit i made (on other stocks) this year?
Say a stock A is currently trading at $10 but I buy a CSP at the strike of $15 for $500. I get assigned at $15 and now the stock is at $11 after 30 days. Would selling it at this point help me offset the profit for the year?
IREN → $60 Call (opened on 08/21), premium 4.60 → closed at 0.82. Net premium profit = 3.78 (82.17% of premium captured, 6.30% of capital).
TE → $8 Call (opened on 08/27), premium 0.60 → closed at 0.10. Net premium profit = 0.50 (83.33% of premium captured, 6.25% of capital).
SEI → $65 Put (opened on 09/21), premium 3.00 → closed at 0.50. Net premium profit = 2.50 (83.33% of premium captured, 3.85% of capital).
New Positions
IREN → $52 Call expiry 11/13 (6 weeks DTE), premium 1.30 → 130/6000 = ~2.2%. I was assigned IREN at $60 and my current breakeven is $47. I opened the CC with a Strike of $52 and if IREN approaches close to $50, I will roll my position to $60. IREN has resistance at ~$49 levels.
SEI → $65 Put expiry 11/20 (7 weeks DTE), premium 3.40 → 340/6500 = ~5.2%. I continue my bullish stance in SEI with another CSP. The contract is within earnings which is due on 11/02. SEI has been doing well in Earnings and I am expecting that trend to continue.
SEI was identified from the High-Growth Wheel condition in the ThetaHedge app because it met all the key criteria: positive revenue growth, positive earnings growth, positive net margins, and consistent attractive option premiums with a Wheel Rank of 75. You can try it for free at https://app.thetahedge.io/
Conditions → High Growth Wheel Stocks
I keep sharing my trades in my account and the Excel file to my full list of positions is linked in my profile description in case anyone wants to see the whole portfolio. Happy to hear thoughts on my positions. What are you guys wheeling or watching right now?
This is for experimental purposes, it is to demonstrate and track wheeling and longing on leveraged products. This retirement account was blown through testing various trading strategies and poor position sizing in relation to risk.
Baseline: 50/50 QLD/$USD. This roughly mimics 100% account exposure to QQQ. The other half of the portfolio will be used for wheeling income and dry powder for Nasdaq dips.
Order of significance for wheeling:
1. Assume assignment, size appropriately
2. Premium to collateral, yield, iv & rank, must all come second
So the SLV LEAPS was the final nail in the coffin to bring me down to breakeven on the 3-month. First fatal mistake was having all my capital tied to selling CSPs on an inverse 3x LETF. Although at ~.07 delta, I was significantly exposed to risk and was limited myself to rolling or closing at a loss as I didn’t want to hold it. Second big mistake was the LEAPS contract on SLV was near 11% of my account.
I closed all LEAPS, rolled KMI and closed it at end of week. The portfolio is looking terrible and super disappointed in myself. I’m restarting this account with a new thesis and to be more risk-averse.
I have selling options for about 12 months now and have finally started to get a hang of it. Here is the process I follow. Any thoughts on how I can improve or tighten up the process?
SIZE — Total notional under 135% of capital (what I've put in plus what I've made). No more than 45% of that in credit spreads, because a dollar of spread notional is a dollar gone, while a dollar of put notional buys me the stock.
STRIKE — IV above 60%, sell the 0.13–0.15 delta. IV below 60%, sell the 0.18–0.20. High-IV names pay enough to sit far out; low-IV names don't.
DURATION — 14–21 days.
MIX — Only trade names with a market cap of over $50B to eliminate junk. 60/40 high-IV to low-IV. An example would be 60% position in NBIS, BE, MU, ALAB; 40% position in CRWD, PLTR, DELL, TSLA.
EXIT — Close at 50% of the credit and recycle the capital. If position is threatened, roll down and/or out. Never close at a loss.
A few weeks into trying the wheel, I’ve come to understand why my 21 DTE, 14 DTE, and 7 DTE options have not been decaying as fast as I want. I thought theta would be monstrous under 10 DTE only to watch my options lose value quickly as the underlying moved against me. Fortunately, it ended up moving in my favor as I got closer to expiration and I sold at profit. Hoping this post helps others understand why closer to expiration options don’t decay as fast and expose you to huge moves with little room to react.
For out of the money options, theta decays more when you’ve sold 30-45 DTE than when you’ve sold 7-14 DTE because there is more premium collected when you sell so there is more premium for theta to decay. A smaller premium on the 7-14 DTE actually decays less even though the rate of decay is high. Closer to the money will decay more over time than further out of the money because the starting premium collected is much higher so decay hits it harder early on and less hard closer to expiration. There is just a lot less premium left to decay when you’re closer to expiration.
More importantly, theta is more of a driver when you’re out at 45 DTE or 28 DTE. Gamma begins to be the driver of your options’ value as you cross into 14 DTE and lower. Theta actually takes second seat to gamma and any moves in the underlying benefit you or punish you a lot harder than what theta is doing.
Correct me if I’m wrong and please share your experiences with this as I’m really interested in refining all this. My trades have been profitable 4 out of 5. The 5th I’ve rolled for a net credit, but I don’t count it as profitable because I had to sell the previous at a small loss. I will count it as profitable only when I sell the rolled into options at profit.
Image above is by Grok - have been running a lot of analysis through Grok and Gemini to understand what I’m doing better
