cash secured puts – SMART Trading Strategies https://smarttradingstrategies.com Statistical and Mathematical Approach to Retail Trading Tue, 02 Nov 2021 05:06:49 +0000 en-US hourly 1 https://smarttradingstrategies.com/wp-content/uploads/2021/08/logo-150x150.png cash secured puts – SMART Trading Strategies https://smarttradingstrategies.com 32 32 The Wheel Strategy for Options https://smarttradingstrategies.com/the-wheel-strategy-for-options/ https://smarttradingstrategies.com/the-wheel-strategy-for-options/#respond Thu, 21 Oct 2021 13:14:42 +0000 https://smarttradingstrategies.com/?p=606 The wheel strategy = Sell Cash Covered Puts + Sell Covered Calls when assigned the stock

Here’s a video discussing the wheel strategy:

Rules:

  • Only sell cash covered puts on stocks that you want to own
  • Sell 30 to 40 days to expiry
  • Sell options with delta = 0.3

Lessons:

  • If you have 50% unrealized profit on your options, you can close to lock in the gains.
  • If you want to buy the stock, can sell puts nearer to the current stock price (higher delta)
  • Can sell weekly call options and at a lower delta (about 30% price distance) if you want to keep the stock
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