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The wheel options strategy is incredibly popular among income traders. It combines the cash-secured put with covered calls. First, a trader sells cash-secured puts and collects premiums until eventually assigned 100 shares. Once holding 100 shares, the trader flips to selling covered calls to collect more premium while waiting to sell their shares. Once the shares are called away, the trade starts over with cash-secured puts, going around and around like a wheel.
In this video, we’ll examine whether or not the wheel strategy actually works with real backtests on TSLA, NVDA, and MSTR. You’ll learn what conditions favor the wheel strategy, and how it performs when the stock plummets into a bear market.
I’ll also walk you through a simple rule you can follow that can lead to massive wheel outperformance relative to the stock price, and when that rule can fall short.
==== Video Chapters ====
00:00 What is the Wheel Options Strategy?
02:14 TSLA Wheel Test Methodology
04:16 TSLA Wheel Results
07:32 Example of a no-profit covered call
08:55 One small wheel tweak that can generate higher returns
11:29 Where do wheel profits come from? (How to Calculate P/L)
13:34 MSTR Wheel: What happens when the stock falls 50%?
14:50 Get the interactive wheel presentation
=== Recommended Videos ===
➥ How to Roll Covered Calls to Unlock More Upside:
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➥ Selling Put Options for Monthly Income:
Disclaimer: Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction, or investment. Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past performance is not necessarily indicative of future results. I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make.
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