The Wheel Strategy for Options

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