How to Trade the Wheel Strategy

[@InTheMoneyAdam]

Spreadsheet: docs.google.com/spreadsheets/d/1RXNUa8-n6r06CdTCt5PxWqoMp6q1ZSZJGEicoP-pGeA/copy#gid=648757628 Like it? Support the channel by grabbing some free stocks in the description! There are a few parts where the audio cuts out. Sorry! Nothing of importance is missing. In addition, I advise that you only trade this in a tax-protected account like an IRA. Your premiums will get destroyed when tax season comes around if you trade the wheel in an individual brokerage account. Robinhood is releasing those now which you should take advantage of if you use RH. Max those contributions baby.

[@christopherganir]

Thank you so much!

[@darkmxhishot7475]

So wait a minute, if I sell a cash-secured put at the beginning of the week with a premium of $200 and by the end of the week that premium has gone down do I still get the $200 premium?

[@darkmxhishot7475]

When you say your put expires worthless do you mean that you don't get a premium because it's too far out of the money? Basically is there any situation where you won't get a premium?

[@emmanuelyemoh8769]

You are amazing, thanx for the excel sheet. Do u hv one for spreads too??

[@TheDarth24]

@@darkmxhishot7475 Yes you get to keep your Premium NO MATTER WHAT. If the world was coming to an end and every one sold EVERYTHING in the market to exit, you would STILL have/keep that $200 premium. I pull out my premiums when i can to help pay bills/debt.

[@HeyBob-O]

You have a natural talent for teaching this stuff and having it make sense so easily. Thank you for your videos!

[@ViperST989]

Agree, I don't know what he does for a living, but he should be a financial advisor. A great advisor is a great teacher.

[@bigrollin]

@@ViperST989 he works at AT&T call center.

[@ThePresentation010]

I disagree

[@betatoalpha3689]

Nothing is natural this man prob self taught like many of us

[@Youtube_ban_me]

HELL NO, he sucks at explaining this strategy lol

[@lilman1317]

I absolutely promise anyone, Ive learned more the first 3.5 minutes of this video than over a year of research. Like I know what he's talking about but the simplicity is beautifully done and makes total sense. Time to go loose all my money on the wheel strat 😂😂👊

[@victorpetrin6323]

I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel. I would really appreciate it!!

[@christopherganir]

You can sell your covered calls at a strike a little below your cost basis if the premium of the call is big enough to cover the difference

[@InTheMoneyAdam]

Valid point except that whatever you sell above your cost basis will be your overall profit. So even if the premium covers the difference, you'd end the wheel at break-even. No bueno. The further you can sell the call above your cost basis, the larger profit you receive. This is why you don't want to get assigned your puts with the wheel, because with your puts there is no obligation to sell at a certain strike to maintain profitability. They are simply used to lower your cost basis so when you reach the point of selling covered calls, your cost basis is so low that you can easily sell a covered call well above your cost basis for a profit. In other words, all that matters in the end is how far above your cost basis you sell your call. That's what determines your profit. Doesn't matter about all the premiums you've collected. If you don't sell above your cost basis, or if the premium you receive for the CC isn't above your cost basis, you won't end with a profit even with all of your hard work. All those CSPs will have been a waste of time. Always sell above your cost basis so you secure a nice bag. If you can't for a good premium, just hold the stock and sell super far OTM cc's.

[@jeffshackleford3152]

Why would you sell at cost basis? You are just undoing all the work you did by selling all the calls/ puts

[@historry9323]

But shouldn't that premium already be included in the adjusted cost basis though?

[@jeffshackleford3152]

@@historry9323 Do your math from a full account and write it out line by line... Example: Starting balance 100k CSP 500.00 Etc

[@brockbah2048]

@@jeffshackleford3152 EXACTLY. I see comments about selling calls at your cost basis but it doesn't make sense to me...it means you're literally breaking even and all that work was for $0 gain. If you at LEAST sell calls at your original buy price, your gains will be whatever premiums you collected during this rotation of the wheel.

[@mattinthehat22]

Your explanation of delta really drove it home for me. Thanks for publishing the SS! For anyone adopting this like I am without the first step of using a "CSP" to acquire their shares (I already had them), then you have to enter "100" in N9 for the sheet to work (or enter the total number of shares you own & adjust it manually if/when shares get called away on assignment of covered calls). Keep the videos coming! Also, a potentially important point here: at about 20:30 you're talking about the potential for lower premiums when selling options with lower delta, HOWEVER, you fail to mention that as delta increases so does the premium (and hence a lower cost basis). And, if one is confident the underlying will go down, then selling for more premium might be advisable - the preference for the .3 delta (and it's implied risk of assignment) is a personal one, but you don't say that. Personally, I consider covered call premiums to be very similar to collecting rent - using someone else's $ to pay the mortgage. In the following example it will take ~7.5 months for the premiums to pay the entire cost basis back. Ex: I bought XYZ for a total cost basis of $530.20; sold a (ITM) covered call at strike price $5 for $.70. If it gets exercised (and it almost did 2 days later when XYZ traded as high as $5.86) I make $39.10 on a $530.20 investment (7.37%) - just remember you may have commissions and fees on options trades you don't have on stock trades (I do). I could have rolled my CC for a slight loss and increased my CB, but was confident it would go back down... it has so far.

[@snafu570]

I don’t comment much, however I wanted to tell you how much I enjoyed your explanation. I have been researching options trading and it seems to me that everyone want to give you just enough information then throws in a sales pitch to get the rest of the strategy. Thank you!

[@Sean-xu5ti]

DUDE!! I love your no fluff, all info way of explaining to us. You are a rock star. Please dont change!! Keep teaching, you are wonderful!!

[@kingofbaccarat-wineveryday6280]

I trade with baccarat live much better and faster... have a look to my baccarat live videos enjoy

[@lobsterstrange]

So if i hold till expired I'll just get premium and not stock?

[@lyuboantonov]

Mind blowing 🤯 teaching skills 👌

[@sDeezyeazy]

@InTheMoney gotta try harder than that buddy

[@veritasmenscounselling]

Yea, extremely talented teacher.

[@victorpetrin6323]

I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel! I would really appreciate it!!

[@greencandletrading3565]

In the top of the spreadsheet I edited it to have a link to this video so if I forget how to do something I can just click the link and follow this video. You may want to edit yours to come that way when people download it. Thank you so much making your content!

[@goldenox2424]

Good idea! Definitely going to do the same

[@cstrand31]

One thing I found out is the formula used for the CC price on the spreadsheet meets to be adjusted by how many shares you’ve been assigned. I’ve been running the wheel for about 2 months now. Have avoided assignment until this week. Had 4 CSP’s ITM. After entering the debit it was saying I needed to sell covered calls for literally 4 times more than what I paid for them. You need to go in and adjust the formula for how many shares you’ve been assigned.

[@bobdaly2890]

100% This is the exact issue I'm having right now. With 4 CSP's too lol. What exactly did you change in the formula? I'm not the most savvy with sheets/excel

[@bobdaly2890]

Figured it out: Select N1, Change N3-O3 to O3-N3. Select N7, change 100 to the number of shares relevant to your position

[@hdb-1999]

Adam, you are an amazing teacher, you make this so easy to understand for me. I started knowing nothing about options a few months ago, and now I feel that I am semi competent. I recently opened a position and am using this wheel strategy. It's great! Thanks!

[@zarifshoeb]

Do let us know if you make profits and how much please

[@bbbobbbieo]

(Try to sell calls above -22.50)@19:13 -> (Try to sell calls above 22.50)@19:22 -> ("Sell above $21.50")@20:20 What did I miss here? Killer video, you're an excellent teacher.

[@InTheMoneyAdam]

The 1.00 credit for selling the call also reduces your cost basis

[@donutt0138]

When you asked "What is the first step" and said "You, DONUT in the front, I literally thought you were talking directly to me LOL. Cool strategy, thanks for this video!

[@InTheMoneyAdam]

lol, thanks!

[@yennieyen3961]

New subscriber to your channel! Great content! This strategy amazing! I just started doing the options wheel today on a larger scale. I made $1700 in premiums from just $12K collateral. That is 14% ROI. My collateral will be released Fri 9/10/21 so then I can rinse and repeat.

[@tattooedsailorgaming9992]

Adam you have literally changed my life with these videos. I am confidently trading the wheel strategy every week! Thank you so much for all the amazing videos!!!

[@maxouw007]

Soooo.. Have you been profitable ? :p

[@tattooedsailorgaming9992]

@@maxouw007 Yes, i am averaging 3-5% a week! some weeks being a lttle less (around 2%) but making money none the less.

[@ChuckTate77]

Have you been assigned yet? Seems that you would want to be assigned as the premiums are better on the call side. Not to mention the profit you would make on the difference between ur put cost and the call strike.

[@MarkVank]

Hey man! How's it going? Still trading the wheel? How was the performance?

[@tattooedsailorgaming9992]

@@MarkVank great! Pulled 87% this year! Learned ALOT! Trade way smarter with the wheel now. But 87% I am extremely happy with!

[@NEyankee]

Good Wheels Vid. I do kind of the same, Except don't roll. Do weekly or few weeks depending. Once I hit 76% profit. BTC & keep cash liquid. Find another Put. Haven't got assigned yet. Like to keep buying power freedom for more puts. Markets been crazy. Thinking about trying vertical put spreads. Spread out over 10 points. Can't stay away from the juicy premiums. Hope I can try different strategies... Because I can't help to buy back before assignment. Even though the cash covered puts. Just worried we're in a bubble

[@Will21086]

Thanks for this video, was super helpful and informative. One thing I’m a little confused on is why you would prefer to sell puts 30-45 days out. I understand theta decay ramps up, but doesnt it ramp up throughout the contract? Wouldnt selling weekly puts be better as 1) there’s less time for the option to become in the money and 2) you wont have your collateral locked up as long and can continue to start step 1 over and over. Any help would be appreciated, thanks!

[@themastersquad818]

Im no expert but when you sell a contract that's further out you receive more premium

[@Honeybadddger]

By far, this is the best explanation of the wheel strategy

[@TheRealNCYank]

This is a great explanation, but I think it presents the wheel strategy as needlessly complex. It’s really a 4-step process, because there is no need to roll forward.

[@kevinVersus]

Exactly. It’s so much simpler than this. 1. Sell CSPut 2. Let expire OR btc if profitable 3. Repeat If assigned shares, step 4 4. Sell CCall 5. Let expire ITM OR OTM, OR btc if profitable 6. If ITM, go to step 1. If OTM, step 4

[@suryavegeta12]

@@kevinVersus You would roll if you have an idea if the market is bearish or bullish. If you think the stock still has a lot of downside then keep rolling to get more profit and this also reduces ur cost basis. It's just an enhancement step.

[@javabudd]

I cannot believe this video doesnt have millions of views. This has helped me tremendously...

[@nathanbeck844]

I love your content. I started to trade options based on what I learned from your channel. Thanks for providing so much value!

[@doublecsquared]

I’ve been running the wheel strat for almost 6 months. Yielded 27% in profit (premiums). I’m a little iffy about selling calls at the adjusted cost strike price- you are wiping away your gains. I prefer to keep rolling and maneuvering and even averaging down my price (via ITM puts!) to get out of crappy positions.

[@jambalaya3308]

Just starting to learn about options and I'm so glad to have come across your videos. I like the fact that you get straight to the point and explain it all in simple terms which makes it easy to understand. Thank you so much for sharing your knowledge. My prayers for God's continued blessings over your life:)

[@hurtner]

Question.. if i am doing a spreadsheet. Should u be doing one for each security that i am wheeling?

[@KarlSasKLumsden]

Hey, you say premium received from csp and covered calls reduce your cost basis, but in your example you don’t add the premium from the covered call to reduced the cost basis. $500 premium reduces cost basis from $25 per share to $20 per share. Selling a covered call at $19 strike price will also bring in a premium to further reduce your cost basis from $20 but you make no mention of that, you simply keep the cost basis at $20. I get that choosing a lower strike price to sell the covered call will run the risk of making a loss or just merely breaking even, but it’d be more coherent if you didn’t exclude that premium.

[@InTheMoneyAdam]

You’re correct, I think I gloss over that when selling a covered call in the spreadsheet, too. My b

[@Michael-bd8zh]

@@InTheMoneyAdam Also, selling an ITM CC will have Intrinsic Value, plus a little bit of time decay. It's not as profitable from a theta perspective, but it offers better downside protection, and does have a use case. I do understand this is a very general video though, and not getting to into the weeds on strike selection strategy.

[@TheDesmosabie]

Glad to see you're well enough to respond to recent comments, still vids too. Hope you keep getting better. I've shared this sheet with someone new to trading this last week. I've been trading (holding selling CC mostly), but am just starting the wheel. Am confused about "commission per contract" box "N10" and how/why it effects column "L" the way it does ? All the way down. As it stands, I don't put anything there, because, it fills in all of column "L", which then adds to debits box "O2" which have not happened yet. It "M9" also says "

[@eliward3432]

Is it best to do this strategy with a stock that: 1. Is extremely stable in price with small tight fluctuations. 2. Stable in price with larger fluctuations. 3. Steady gaining (like Microsoft or Google) 4. Steady declining

[@paulpanetta3775]

Most excellent. thanks. Question. Why not move closer to ITM for the CSP and CC with a higher delta to get more premium and skip rolling? Getting called out fast allows one to be more nimble even though the theta is higher. In that way, you keep all the premium and the premium is higher. While there would be more churn in terms of buying and selling the stock which ties up more collateral, the profit grows higher faster. If done weekly...like or close to your example then profit rises faster. Yes? no? thoughts?

[@nathanielgonzalez9598]

Hey, man. I love your videos, but I was hoping I could ask a question about your Wheel Strategy. I was thinking about doing the Wheel Strategy, but on a weekly basis. My plan was to sell cash covered puts on a weekly basis, roll out when possible, and then essentially repeat the process with covered calls when I'm eventually assigned. However, I have heard doing cash covered puts and covered calls on a weekly basis is ill advised. Is there a reason for this? I understand time decay is not as powerful, but based on the pure price of premium, I can potentially make more money if I sell contracts for premium on a weekly basis rather than a monthly basis.

[@twig1777]

Did you ever get an answer to this question? I'm wondering the same thing myself.

[@nathanielgonzalez9598]

@@twig1777 I did not, but as I've started trading more I understand why it's a bad idea now. The whole reason for the Wheel Strategy is to place time decay in your favor. A week simply isn't enough time to fully take advantage of that, so you'll be completely reliant on a large price movement in your favor. However, if you use these on a monthly basis, your time decay has more time to decrease the price of the contract allowing for you to buy it back at a much lower price by the end of the month ( assuming the stock price behaved as anticipated, of course).

[@christopheroleary9455]

I watched your videos a year ago and my brain turned to mush, but now, I am starting to understand and this is blowing my mind. Thanks for the videos!

[@DD-fq3oh]

Dude! This is what I’ve been waiting for. I’ve watched all your videos and have already started trading. You are so much more entertaining and educational than the other stock youtubers. Keep up the awesome man. Thank you!

[@hericium_erinaceus]

This video is gold! I keep coming back to it and learning more each time. With all the mania going on with AMC, I'm going to be running a modified version of the wheel, I started off with buying the shares first since I had a high expectancy on it going up in price and it totally did go up in price, by a lot, so when entering the info on the spreadsheet that you shared (thanks a lot btw) I'm starting off with buy to open 100 shares of AMC at 27.80 instead of a bto CSP and I believe it was the smart move because AMC as of right now is hovering around $40, I had a covered call on it at $35 that I just rolled to $70 with 79 days to expiration.

[@baboonaiih]

This is exactly where my brain went after watching the selling csp video. I originally was just going to do covered calls but this seems much more useful

[@xenod1066]

How often do you do it? About how long do you keep positions open? Thanks.

[@livedeliciously]

I definitely found my favorite stock market strategy with the wheel.

[@victorpetrin6323]

I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel! I would really appreciate it!!

[@bradbentz9818]

@Inthemoney When you bought to close in the second step at the 16:15 mark, wouldn't you have to buy back at the same expiry date as the original csp before rolling or am i missing something? Great video though thanks!

[@Warrenzeidersprivacy]

I've been trading for a while now with a good winning strategy and it's going pretty well I can assist you with the company broker and stuffs I used in getting started

[@kaceyjones7694]

What would you say about a simplified wheel strategy for beginners to this strategy? If you remove rolling your positions and let positions close themselves it could simplify the strategy and allow beginners to familiarize themselves with the strategy and create the good habits. Later they can look to build on their knowledge basis and add in rolling positions. Thoughts?

[@ChuckTate77]

Rolling your option sounds more complicated than what it really is. A few brokers even have a "roll option" button and once you pick your strike/date, they will do all of the rolling for you.

[@MrMountain707]

@@ChuckTate77 Which brokers do that?

[@ChuckTate77]

@@MrMountain707 I believe it was TastyTrade that had the rolling option button. I’ve have since quit using them but that’s who I was using when I watched this video.

[@Kid_Ikaris]

The downside of running the wheel is that potentially you'd be better off just owning the stock correct? So does it make sense to own 100 shares of a stock before running the wheel, so that you're hedged either way? Things are flat, you collect premium. Things are good your stock appreciates. Things are bad you're fuct, so maybe buy a LEAPs Put? (New to all this)

[@patrickrene1133]

You've made learning options super easy. Thank you! How do you fill out the spreadsheet if you're running more than one wheel strategy at once? You may have multiple actions in between getting assigned or closing your position.

[@ChuckTate77]

Because of the formulas in the document, you cannot have more than one wheel at a time on the spreadsheet.. So just copy and paste a new tab in the document and have one tab per wheel.

[@victorpetrin6323]

I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel! I would really appreciate it!!

[@zarifshoeb]

24:52 voice cuts out. I noticed that in several of your videos so just informing you. Besides that, your videos are EXCELLENT ! They helped me understand calls, covered calls, puts, chash secured puts and roll over and now the wheel strategy perfectly. You made it very easy to understand like no one else can. Thanks and good bless.

[@InTheMoneyAdam]

Editing whoopsy, nothing important is missed. And thank you!

[@NassNassKPB]

Just wanted to chime in and say thanks for explaining things with such clarity. I thought it might be a good idea to have a commissions column in the excel spreadsheet because they do add up and I think if people are already taking the time to track their cost basis what is adding another number going to do.

[@michaellong570]

Great video. But why not do this with weeklies? I think in your example, you did 30 to 40 days out, what is the reason for this?

[@GeoffreyGonzales]

i dont trade i just watch these videos to make my brain hurt

[@jeffgoggin1394]

I thought Delta was the measure of the relationship the option moved vs the stock? Like .30 would mean if the underlying moves $1 to option moves .30?

[@everytimewetouch]

damn and people are charging money to teach this strat, thanks again boss man

[@marktruluck2005]

I click on the spreadsheet link but there isn't a top menu available to copy the sheet in Google sheets.

[@scoutpotato]

Thank you. Learning a lot. Do you have any suggested resources for understanding taxes with gains and potentially limiting them? Like transferring into retirement as an example?

[@cjgino311]

If you get assigned, can you use margin to pay for the underlying stock? Then sell for profit and pay off margin? Then start again at step 1?

[@giacomomartinelli2427]

Jezz we are so fortunate nobody teach this things at school lol Imagine the competition

[@jerseyse410]

Shit, they didn't even teaching this in College. I was a finance/accounting double major and no corporate investment theory class even touched on this.

[@Jimmy-sj8pi]

@@jerseyse410 there's a reason why the education system is useless

[@codyehmke1218]

for real

[@sachinnair1613]

@@jerseyse410 Makes me even more excited to use this lol

[@daillengineer]

@@jerseyse410 you should have had a class on derivatives as a finance major. I know they do at colleges like Fordham University and Baruch College in Manhattan. I learned all this as a math major tho. That’s where you really get into the mathematics of how options pricing works and the mathematics of all these strategies and hedging positions.

[@IIDTXxPRoII]

Hey so I understand we never wanna sell a covered call under our cost basis, in your example $20 was cost and the $19 covered call wouldn’t work. But what if the premium/credit received for selling that call was let’s say $3.00. Wouldn’t our cost basis now be $17 per share and thus making the $19 covered call ok? Because we would still be above our cost basis? Sorry if I missed or understood anything but I’m just really curious about my above example. Thanks!

[@schuylerjohnson1107]

GREAT CONTENT. I'm an older person getting into options trading. Absolutely love this fantastic teaching. Thank you 🙏🏼

[@victorpetrin6323]

I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel. Maybe drop a suggestion or anything you didnt like, I would really appreciate it!!

[@WillEstateGuru]

What if you are holding shares during a crash or steep correction. Would you suggest writing in the money calls to get out of your position if the premium is high enough?

[@textme4597]

start making money👆 and income. Ask me how??👆-://

[@codyjones2540]

You’re a good man! Thanks for this INVALUABLE knowledge.

[@edmandell3064]

Great Video. When using the Wheel strategy is it better to use 1 stock with multiple contracts or several stocks selling 1 contract each?

[@1mikesmiley]

I have 100 shares of something. I sold my first (share secured) call. I learned in this video, I don't have to wait for it to expire. I can buy to close it. Wow, mind blown!

[@APG103House]

What do you mean? You have to Wait until the contract expires don’t you?

[@1Poiuytgfdsa1]

@@APG103House no, you can “buy to close” the position. You sell the contract and you can then buy it back at a much lower price, or you can wait for it to expire. I would recommend buying to close all positions, even if on the day of expiry - there is a chance after market can blow up and you could get exercised.

[@1mikesmiley]

I used to think I had to wait till expiry. But I don't. I can buy to close. Then I can resell to a later date. That is rolling it back as I understand it.

[@APG103House]

@@1Poiuytgfdsa1 you loose money by buying lower ?

[@alexllamas7634]

I thought you had to wait for expiration when selling CCs. I lost 100 shares of NIO because I didn't know this.

[@ronicrum]

You are awesome....so normal and so natural and so informative....keep it up!

[@nelsonpropertygroupllc]

I'm just here for that T-Shirt!!! Let's go!!

[@victorpetrin6323]

I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel! I would really appreciate it!!

[@ttrevino1314]

Great video on a subject that can be hard to digest. You made it very easy to follow and understand. Thank you

[@rafaelcardoso4868]

was waiting for this, good stuff!! how would you manage/protect against the situation where the shares you get assigned from a CSP fall to the point where you're not able to sell above your cost basis for much of a premium? i.e. how to not be left bagholding lol, and is this something that happens often at all when employing this strategy

[@boomerrawlings]

This is basically the only risk of the wheel, and the reason that you really only want to wheel with a company that you’re comfortable owning. (And are confident will continue to grow and at -some point- be worth more than what you paid when assigned)

[@rafaelcardoso4868]

@@boomerrawlings makes sense, was thinking of also hedging with a put for that scenario

[@forgotten_faith]

You know you're a good person when you know you get something out of webull if people sign up but use it as a choice donation to support the channel rather than an AD.

[@piraco33]

I was literally just researching this and I happened to find this video before it's even properly up, dang

[@piraco33]

@@pascalfrancisco8795 Yeah sounds legit

[@stevegarrison4503]

In the scenario when the stock declines and you have to roll your put out for a credit....You say you may not be able to get any more premium, How so? Assuming initial stock is at $100 and you sold the $90 put now the stock is $90 and you buy the put back. Now you are going to roll it down and out to say the $80 put now, Or are you always trying to sell the same strike ($90) just farther in the future? I don't think you quite covered that when rolling (what parameters to try to stay within). Thanks!

[@flippingforprofit]

He covered it. He said to choose a put strike that was 30% delta, so 70% chance to stay out of the money. So if you bought to close your $90 put, you would take a loss, and then buy to open another put with a 0.3 delta and collect premium. That could be $80, for example, and it would be out of the money (and further in the future).

[@guhdzilla]

Also regarding "...you may not be able to get any more premium..." it's not that you can't get more premium, but if you keep rolling at some point it doesn't make sense as the premium you do get is so small, that you could make more money by getting assigned and selling CCs that are closer in time and/or strike.

[@shawnhouston3975]

Hey thats an amazing shirt where did you get it?

[@InTheMoneyAdam]

Found it in a dumpster out back

[@richardsims9686]

Thanks!

[@johncalvo1743]

I've been doing this for years. I didn't know it had a name. I call it my "windshield wiper" strategy.

[@ChuckTate77]

Crunching the numbers on paper, it seems this wheel strategy could be nice consistent monthly income. Does your previous "windshield wiper" strategy results agree?

[@johncalvo1743]

@@ChuckTate77 Hell yes. That is one of my main strategies.

[@ChuckTate77]

@@johncalvo1743 never ran this strategy and I’ve got about $2500 to do this. I Just don’t know what stock I would want to keep... so many good ones. Lol thanks for the reply

[@johncalvo1743]

@@ChuckTate77 Right now I am doing this with DAL, AAPL, BAC, and DFS.

[@mikeklocke]

@@ChuckTate77 I look for stonks with a favorable P/E ratio.

[@MCsFlake253]

Is a .2 delta safe to sell puts on margin... say weeklies w/TSLA?

[@jesimoyes4218]

I'm curious how you learned all of this?

[@JeffJonesJr]

Given the covered call is above your cost basis, what DTE do you like to prefer, as early as possible as long as above the cost basis?

[@DocPlaysBad]

Rewatched this a couple times. I am curious what you look for on the stock charts to determine if the wheel is a worthwhile strategy to run. Your videos break down options trading very simply, I appreciate it!

[@billc3114]

Traded stocks and loved it. Lost money when I was younger chasing cheap stuff. But never had the money to get into options. Now, I can save the money while learning. Great channel!

[@putt7515]

Bruh so many bots in the comments

[@DanGonzalesDenver]

Thanks I watched a number of videos trying to explain the wheel tonight and yours was the most helpful

[@patrickp2836]

As someone who has been doing this strategy for a while, I can say you should not follow his consistent advice to avoid assignment or his advice to roll a trade. If you try to trade OTM puts to avoid assignment, you won't make very much money and secondly if you do get assigned the premium collected will be so low that it would make the cost to get out of the trade ie the strike to sell a CC higher then you would need if you just went for the bigger premium selling close to the money puts. For example lets say MARA is at 21 on Monday, if I sell a put as 20 on something like MARA I could collect over 250-300 just for that week bc the stock is so volatile. and even if I got assigned because the price fell to 17, I would only need to sell the Covered Call at 17+ to make money on the trade. Where as if I sold that same trade but lets say, MARA was at 24 so at 20 I would be OTM and only collect 30 dollars or so. ff the stock went to 17 that week and I got assigned, I would need to sell the CC the next week around 20+ collecting way less premium again. You should not try to avoid assignment, as getting assigned is part of the strategy and you would do more harm trying to avoid assignment than is worth it. Plus you should not ever lose money by 'rolling' a contract as you would have to pay back more money than you received for the trade. There is literally only 2 ways that this strategy can fail 1. being assigned 100 shares of a stock where the price goes so low that you can't sell a Covered call for profit, or you have to sell at a lower strike CC and the shares get called away at a lose (but this is avoidable if you trade cheaper stocks). and the second way to fail at this strategy is following the 2nd piece of terrible advice to roll contracts/ie buy back a contract losing money to avoid assignment. Both would be avoided if you only play stocks that are cheap enough that you can scrounge up enough money to buy 100 extra shares if you needed to lower your cost, so if you sold a 20 put and got 200 dollars and the price drops to 12, you can either buy 100 more at 12 and sell 2 CC at 15 to be profitable or sell another cash covered put around 12 to make more premium to lower needed strike on the assigned shares.

[@jamestimberpass6352]

I know why you say to sell with 30 - 45 DTE, but why not just sell a weekly every week over the same 4-6 weeks and bring in 1.5-3 times as much premium for the same time? Plus you get higher theta the whole time.

[@jerrytom3514]

I’m really surprised anyone even talks about the wheel strategy. It can destroy you if the market goes south. Just my two cents. Thank you for the info

[@theccpisaparasite8813]

Why not sell with even shorter time periods... 2 weeks for example Also, bear in mind, the IRS has a different view of what cost basis is.

[@brockbah2048]

I may be wrong but I believe he mentioned better thetas on longer expirations, so collect a higher premium on a 30 day expiration then you can roll your contract early for $.01 instead of waiting the full month.

[@brockbah2048]

I'll add that currently an Apple .3 delta put premium on 12/18 is $1.30, while 12/31 is $1.85. Obviously the 12/18 is a better adjusted return but maybe it's different for covered calls?

[@theccpisaparasite8813]

@@brockbah2048 ? Your thetas are always better with less time remaining, are they not? I re-read your post and you may be right with an opportunity for an earlier roll rather than going down to expiry or even down to 0.05

[@brockbah2048]

@@theccpisaparasite8813 I think you're right, except for with high volatility stocks like Tesla. It seems the premiums go up exponentially the further out you go

[@theccpisaparasite8813]

@@brockbah2048 actually, the high volatility high dollar stocks are my favorite. You can write puts way out of the money and still make good premium and if it gets exercised, so what? You end up owning a stock you sort of like for a pretty good price ... that you immediately start writing calls on. Granted, it doesn't always work out ... as I found out this morning (pre-market) with Qualcomm ... when Apple just announced they were going to dump QCOM as their main chip supplier and bring it in-house. That hurt as they are down 8% as of this post. ... yeah, that hurt. Every now and again something can just nail you. Then again it deals with account size. To write a CSP on something like TTD, is going to tie up $85,000 in cash/margin. For me, writing a put that 1-1.5 standard deviations out is good. I like writing the short times because theta wipes the out pretty quickly. In my experience, writing 2-3 short term puts, instead one 6 week put nets out more premium. Each option is for less premium, but you can write more of them which nets out to more return on the same 'margins. That being said, I'm no expert and have made some bad errors on the way.

[@ultra3331]

If you wanted to do the wheel strategy as your primary trading strategy, would you dedicate your entire portfolio to it, or maybe like 75%, then use the other 25% for whatever?

[@jeeenyus4385]

Check out his last video from about 2 weeks ago. It kinda goes thru that.

[@tmoney-fh2yh]

I assume this strategy works the best with highly liquid option stocks.

[@heruilin]

Indeed, can't down/up and out if there is no liquidity.

[@mikeklocke]

@@heruilin you don’t need volatility when you have theta working for you

[@Humanhead86]

what are the pitfalls and most common mistakes in this strategy? is it possible to lose all your money?

[@jason9875]

“Just have fun” yesss

[@brickbrkr123]

How do you pick your stocks to begin your wheel?

[@Kiefdaddy89]

Hey, thats a pretty cool shirt.

[@shawnhouston3975]

Your right, It is a cool shirt

[@humblelearneronyt8232]

One with Kief

[@CristianHernandez-312]

Ditto

[@sherryalfiebestprotraderik8949]

@@pascalfrancisco8795 The world is really changing indeed, everyone wants to earn via trading now, am beginning to think am being left behind

[@allinwitad5557]

If you're neutral or slightly bullish on the stock and ok with being assigned, would it be more profitable to sell both CSP and CC at a higher delta than 0.3? or even right at the money? Wouldn't this increase your return and also increase frequency of assignment(which we are ok with)?

[@allinwitad5557]

Actually I just watched one of your videos where you talk about this, so nvm. But, I'm curious if when researching which stock to sell a put on do you factor in something like the 50 day moving average? I'm still a lil new but makes sense to me to sell puts on stocks below the MA and are trending up...?

[@faithsrvtrip8768]

Thank you. I took accounting years ago. The thing that infuriates me with options is how do you know if you have made or lost money? That spreadsheet is exactly what I needed to try trading live options! Thank you so much! You got a new sub, too :)

[@Wordsalad69420]

If you can't figure out if you've made money or not, then you shouldn't be treading options, because it sounds like you have no idea what you are doing.

[@valerie486]

@@Wordsalad69420 Yeah, people gotta start somewhere. Shut your mouth if you have nothing but useless toxicity to spread lol.

[@poif]

what happens if you have been assigned and is holding the shares now, but the share price is way way below your cost basis, how do you recommend going about selling covered calls? assuming that an above cost basis call is only 0.05 delta and not worth much premium

[@poif]

@@scottreesetradinginvesting7936 thanks brother, makes a lot of sense

[@elfrenavilas]

Traders should avoid attempting to predict trend reversals, or even worse, I believe there is more to this market than we currently understand. When people are losing, they don't endeavor to increase their average. Using expert mrs Amber Rebecca assistance, I've made almost 9.5 btc on a 2 btc Trade capital over the last 8 months.

[@matinsorkson]

I invest with Mrs Amber Rebecca too, she charges a 20%commission on profit made after every trading session which is fair compare to the effort she put in to make huge profits.

[@elfrenavilas]

@Mason alfie You can communicate with her on telegam with the username ...

[@elfrenavilas]

invest with amber

[@lusmas99]

nice video, but where are you getting $5.00 credit on $25.00 underlying with 30-45 DTE with a 30 Delta? thanks

[@Rt-hr4nd]

The problem I have seen with this strategy is actually finding enough 'good' stocks that I'd want to own and that have an affordable price for cash secured puts. Lots of the popular stocks / ETF's that have good option premiums and volume trade for several hundred dollars a share, which is too high for cash secured puts (how many people can afford 100 shares of Apple as part of a well diversified portfolio for example?). The other problem with this strategy, is that you have to feel comfortable owning volatile stocks. You're not going to get any worthwhile premium selling puts against a safe, dividend paying company like Coca Cola etc. You're ultimately taking a risk then to get a decent premium against a more volatile stock like Virgin Galactic or Draft Kings for example. These stocks could tank at any time and you will be stuck with an unrealised loss for a very long time if that happens.

[@jkk20]

all of these strat don;t work unless you have 1+ mil in an account,and its still not the best income.... just sell leap covered calls then re-invest the premium into other dividend stock/etf rinse and repeat. better yearly compounding.

[@sulaymanbarrow7369]

Nio,plug,plantar just name few good companies with good premiums, and u can own 100 shares at good prices

[@Rt-hr4nd]

@@sulaymanbarrow7369 it depends on what your definition of a 'good stock' is. The stocks you mentioned are volatile so you'll get a good premium selling puts, but you could easily get assigned at a high cost basis if the stock suddenly drops. You won't be able to sell covered calls after assignment unless you wait and hope that the stock price recovers reasonably quickly. There's no guarantee that it will.

[@Rt-hr4nd]

@@jkk20 interesting. I'll have to look into that strategy a bit more. Thanks

[@jkk20]

@@sulaymanbarrow7369 nio isnt a good stock.. neither is palantir.... just build enough wealth to own 100 shares of a highly liquid options stock. and sell leap covered calls. out of the money of course. so easy. because calls are rarely exercised that far away from expiry thus giving you plenty of time to accrue dividend all the while letting the premium accrue dividend from reinvestment,of course pay attention to tax liabilities,unless you are investing from a registered account,in wich case it will come later down the line.

[@Mschmitty32]

Would you consider the wheel strategy the easiest options strategy to manage overall? I'm starting a 9-5 and I don't wanna give up options but I don't see many opportunities to check positions during work so it'll all have to be automated

[@sulaymanbarrow7369]

I'm a fan of my weekly premiums..30 to 45 days out is no go for me

[@tonyh1718]

i only do weeklies too

[@gordontomaszewski1420]

Yep time decay is your friend the shorter the better. Longer expirations allow for to much to happen!

[@herczegmarton7028]

How much can you make with weeklies?

[@louieestevez8584]

Okay only question i have, not sure if i missed this in the video or any of the last ones, but on cc when assigned do you keep premium? thank you

[@helenoliver4838]

My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless.

[@danieljamal3709]

The key to big returns is not big moving stocks. It's managing risk to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.

[@georgecooper8750]

Agreed. I've traded for several months. I barely knew anything about the markets when I started but recently, a friend advised I get a financial advisor that has good experience. I did and things changed. My portfolio grew by 150% in 8 months. How was she able to achieve that? She invested my money in reputable companies which their stocks must always rise after any dip.

[@helenoliver4838]

Hello Dev, I’ll recommend Tamara Diane Hagan for you, her strategies is working for me for months now and I’m making good profit from the stock market and she's 100% honest, reputable and trustworthy

[@helenoliver4838]

Run a search with her name online, she's a registered broker.

[@forgotten_faith]

I think what Helen is saying buy stocks and cost dollar average over time your portfolio will perform regardless which way the market will move because inflation, GDP will rise. In Capitalism our economy runs on debt the more lives in America the more debt we will accrue.

[@vaughnsays1]

Great Video. Very helpful. When using your Spreadsheet and completing one round of the wheel. Do you erase and start over? Or do you keep listing things below your closed contracts to have a running P/L or cost basis. I ask because after assignment, when selling CC's your strike price is lowered by the previous profits you've generated. This could lead you to selling a CC lower than when your put was assigned. Thanks in advance.

[@cameronrickard5658]

Pattern recognition, stock picking, when to buy or sell, entry and exit points? A few must knows for every newbie before getting around to placing a trade, Don't rush the process. I started profiting from the market when I discovered a better and more effective way to trade and make money. I'll be on to seven figures by years end. Kudos

[@vincentjoker4280]

Well all my efforts have gone downhill I tried to trade on demo account, could you elaborate on how you've been making profit, I don't really understand most stuff I see on trading apps but i am definitely interested in making money, I need a better way to trade and profit

[@cameronrickard5658]

Truth is although my portfolio is stable and profitable I can't say I've put a lot of work by myself into it, on my own I could barely keep up with the changes, crashes and fluctuations, I do my trades with a licensed and Bloomberg recognized broker Mr Noud Mika, he handles my trade affairs and profits for me affording the opportunity to learn and earn comfortably. I met noud through his webpage and I had him navigate my account through the EV and pharmaceutical surge and he made a comfortable $500k off them. Since then his been at the helm of my trade affairs

[@sophiastones2719]

You make it sound easy. I've been trading for a while and coming across licensed pros from a good source like this isn't easy you know. Some rich folks hide the source of the success. I won't pass up the opportunity, Is Mr Mika available to new investors? How can I contact him?

[@cameronrickard5658]

His mail is @

[@jpnm81]

BS

[@The_Vigilante]

Bro so glad I found your channel, you know how to simplify things. Keep up the good work.

[@herrickinman9303]

While you're collecting all this chump change from selling puts and calls, there's the very real possibility of loss in value of the stock after you acquire it via put or loss in value of the stock while it's covering a call. At least this "wheel" strategy isn't going to blow up your account or your life savings like a credit spread where only one leg gets assigned during after-hours trading. (Assignment during after-hours trading can happen any day that options trade, not just on expiration day.)

[@robdoesweather6758]

This is why you only sell puts on stocks or ETFs that you would like to own. It’s possible a stock could drop huge and you could be assigned and stuck with a falling knife. Although, if you sell the put on a stock you don’t mind owning then you should believe that the stock is going to increase in the near future. But I do agree it’s a risk you have to take

[@Putseller100]

You don't seem to like credit spreads, short puts nor covered calls, what strategy do you like?

[@ilovehihats]

@@robdoesweather6758 yup, actually liking and wanting to own the stock is the most important detail of the wheel.

[@herrickinman9303]

@@Putseller100 I like buying a call or a put when a breakout opportunity appears on a daily price chart. I look for triangles, wedges, rectangles, support and resistance, and channels to identify breakout opportunities, stop loss levels, and profit-taking targets. It's not unusual for my option to double in value. All you have to do is know how to analyze a price chart. If your profit:loss ratio is 1:1, only half your trades need to be successful in order to breakeven. These are swing trades lasting 1-5 days, but often closed out the next morning shortly after the open. I usually do these trades with SPX options or SPY options with 1-2 weeks until expiration, and I'm not at all shy about buying OTM options. Breakouts from triangles usually resolve within a matter of a day or two, and the target can be predicted by technical analysis. You risk thousands of dollars on a credit spread, covered call or covered put just to collect a $50 credit. If you day trade ES eMini S&P 500 futures contracts, you can easily scalp $50 per contract in a matter of seconds, risking only about a hundred dollars (you limit the risk with a stop loss order) per contract using a scalping strategy that has a very high success rate. The day trade "margin" (performance bond) at many futures brokerages is only $500 per contract, and you can open an account with as little as $1000. There's no Pattern Day Trader rule in futures; there's no limit on the number of times you can day trade, and no need to worry about delta, theta, bid/ask spread, liquidity, exercise, assignment, after-hours exposure, choice of strike, or choice of expiration. The ES has huge intraday trading volume and tight bid/ask spreads. The ES tracks the S&P500 index. One ES point is worth $50 per contract, so the leverage is essentially 50:1, comparing ES to the S&P500 index. That, in a nutshell, is how I prefer to trade. But it's interesting to hear about other trading strategies.

[@jschro446]

What about wheel strategy but doing weekly options instead of 30-45 days?

[@sabriath]

OMG NOO!!!! There is a small piece of bad advice in this video, please make your viewers aware of this, as it is crucial. The "cost basis" is figured for ZERO profit. Let me explain, if you sell CSP for 2, then roll for 0.50, then get assigned at 25, your cost basis is, in fact, 22.50...HOWEVER, if you sell a CC at 23 because "it has to be above your cost basis" then you are reducing your profit to 0.50 (plus whatever you will make on the CC) and you lose the 2.00 from the initial CSP. Let's run through a scenario with your spreadsheet: CSP 2.00, BTC 2.50 CSP 3.00, Assigned 25.00 (cost basis 22.50) CC23 1.00, BTC 0.05 (cost basis 21.55, let's pretend stock keeps falling) CC22 1.00, BTC 0.10 (cost basis 20.65) CC21 0.80, BTC 0.10 (cost basis 19.95) CC20 0.50, Assigned 20.00 Even though you sold 8.30 worth of assets and only incurred 2.50 in liabilities, you bought shares at 25 and sold at 20, taking a 5.00 loss. Your total profit is only 0.55, which is the difference between your final cost basis (19.95) and your final CC strike (20) plus your final CC price (0.50). ALL of your other work is negated because your calculation doesn't take ANY money out for a "rake" (profit to your pocket for the transaction). Also, N7 calculation is assuming 100 shares, which isn't a good thing when you are allowing any number of shares in the sheet in other areas, which can confuse new people. Personally, I prefer to sell the same strike price (or higher) that I was assigned when the CSP hit, regardless of cost basis. I will only sell as early as possible, no more than 6 months away, and it has to return a minimum of 0.025% of the strike per day I have to hold (9%+ APR). If I can't, then I will look to do a call-spread reduction factor to get out of the position for the same profit potential. For example: I'm assigned 100 shares of F at $10, nothing looks promising at 10 strike for Calls. If I sell the 8/9 Call spread, I can collect $21, and if the stock goes up, I sell however many shares to make up the difference of the loss (so if it goes to 8.50, then I "lose" $29, so I sell 4 shares to collect 34). I keep selling spreads until I can get rid of the position entirely. This is a rarity though, usually the first time I sell a spread, the price normalizes back up and I close the spread and sell a CC further out and at the proper value for just a pinch.

[@InTheMoneyAdam]

A new cell was added a few hours ago to correct for N7’s calculation. You’re right, cost basis is for 0 P/L. So selling a cc with, for example, a strike one point above your cost basis would result in giving up a lot of hard work if you get assigned. That’s where the idea of “avoiding assignment and rolling your position” helps beginners avoid being assigned at a price that is not preferable. If you follow “avoid & roll”, you will continually roll your strike up as the stock rises in value. When you do eventually get assigned, it will hopefully be WELL above your cost basis. So if you follow these rules: 1) always sell CC’s above your adjusted cost basis 2) Always try to avoid assignment and roll your position when necessary The results are: 1) You never go through one cycle and end with a realized loss 2) You will likely sell your shares (when your CC is assigned) well above your adjusted cost basis. For these reasons, I do not believe I made an error in this video. Of course there is more to study and hone in when it comes to this strategy, but I do not believe a gave misinformation.

[@cachewilder4059]

First video I’ve seen from you and wow everything is explained so nicely for me to understand, I like the visuals and the spreadsheet! Earned a subscriber

[@Christensend]

You explained this pretty well. Lately, I’ve been less dependent on my 9,5 job to cater to my needs as my investments in the options market cover my lifestyle. It's been a source of passive income for me.

[@Christensend]

@@Halllaand I know that learning the ins and outs of trading is not for everyone. Personally, I trust Levi Clemans as he's the man behind my success. You can reach him through the

[@Christensend]

Levi Clemans (a) Gma Lcom... You can reach him through that

[@Zmlambo]

As I go deeper into the market with Levi’s help, the more my portfolio focused more on income and the preservation of capital. That a higher allocation in less risky securities, that will give me returns. Thanks to him, these securities provide income that I have used to live on without having to touch my savings.

[@brandongait2234]

@@Christensend You did well. Seen remarks of his works. Haven't had any luck with investing too as this is my first shot and won't mind him helping me for a fee. I'm awaiting his response. Bless you.

[@Freddylone]

@Eleanor Woodbead sure he does, and with the way, I'm going going, I'm definitely hitting my first $100000 by June !

[@bassfan71]

Adam what a fantastic explanation of the wheel strategy. I'm definitely not the first or only person to say this but you're a excellent teacher!