My Top 5 Wheel Strategy Dividend Stocks (2024)

[@tonycrouse6544]

Thank you. Really enjoy your website and all the tools you offer.

[@orgelssecondrule9221]

Best tools at any price

[@timmynguyen3410]

Thank you for another great video. Do you have strategy for LEAPS stocks?

[@yieldcollector]

Thanks. When I buy LEAPS I usually go for the 75 delta with at least 365 dte. I also prefer growth stocks for LEAPS as well.

[@Downsize1940]

Keep them coming

[@richardthorne2804]

SBUX has been a good wheel stock for me b/c it traded sidways in 2023 and i did like numerous round trips with being assigned and being called away. It was cash flow machine but my best performer easily was IWM.

[@coocoocachooglin]

As a fairly new option trader, I really appreciate seeing your selection and analysis process. I’m trying to find a consistent, repeatable, process that will easily scale up so I can optimize my buying power.

[@frg2583]

I' do not know if it is just me but i' confused about how backtesting option strategies work? Essentially, any trading strategy, including options, is built on three foundational elements: Entry Signal: The specific trigger that signals the start of your trade. It's what tells you when the conditions are just right to enter the market. Position Type: whether you're going long or short Exit Rule: Establishes the criteria for closing out your position, whether for taking profits or minimizing losses. So, when it comes to option strategies, the same principles apply. You wouldn't initiate a trade without a clear signal. The bit i'm missing is the signal to enter the option trade. Thanks

[@yieldcollector]

The built-in backtester from Active Trader Pro only backtests Cash-Secured Puts and Covered Calls. It just opens a trade with 30 DTE and then rolls it out win or lose with 1 DTE left. This is most likely not how you would trade in real life. It is just a good way to apple to apple compare the results for different stocks. Most likely you would be able to outperform these backtests, because you would use your own discretion and only enter when you think it is a good time. With paid backtesting tools you can use more entry and exit criteria for more realistic results. But I use Active Trader Pro for these backtests because it is free.

[@ChristopheAngusBowmore]

Thx for sharing your knowledge

[@natramani5608]

Can you include columns for earnings and ex div.dates. That can change the outcome. Thanks.

[@yieldcollector]

Good idea. I'll put that on the road map.

[@johnwilliamson958]

Does it make any difference if the back test was 30 days and the DTE was 20? Same difference if still OTM or ATM depending on % success?

[@yieldcollector]

It's close enough for me. But in Active Trader Pro you can set a custom backtest DTE if you really wanted to be more precise.

[@matthewglaser1812]

Why do you prefer Delta over Probability ITM to estimate probability of assignment?

[@yieldcollector]

They are similar. You can use either.

[@bakotako]

Umm you annualized isn't right. You used 365 should be 252 to be accurate as you took the monthly without the weekends. Also how is this a dividend stocks? They are less than 2%. I use VZ which is like 6%. This is important as they behave differently relative to market in a bull or bear market

[@yieldcollector]

I personally prefer lower yielding dividend stocks because I like the growth better, but that is a personal preference I suppose. As far as the annualized, I believe that I did it correctly www.borntosell.com/covered-call-tutorial/calculating-covered-call-returns .

[@quartzimaging]

I follow your reasoning in how you select contracts, but I do not see your reasoning in how/why these five tickers are your favorites. Is this list simply accidental reflection of your previous experience, or did you systematically screen on their qualities? And more important, what qualities did you filter on? ps: this vid looks at selling puts but that is only half the story--what are your techniques when it's time to sell calls?

[@yieldcollector]

These are the dividend stocks that performed the best for me last year. When I get assigned and it's time to sell Calls I try to sell them around 20-30 delta range. I always make sure to sell them above my cost basis.

[@quartzimaging]

Okay, thanks. I presume you also used similar strategies for a larger set of dividend stocks. Do you have ideas about why these particular tickers performed better for you than others? @@yieldcollector

[@yieldcollector]

Yeah I trade the Wheel on a lot of dividend stocks. I get most of the opportunities from the Income Trifecta scanner on my site. Not really sure why these performed better than the rest. Maybe it is because they all have decent IV, while many dividend stocks don't. My growth stocks definitely outperformed my dividend stocks last year for the Wheel.

[@quartzimaging]

I like the principle of the trifecta strategy. I have only recently started playing it but initial success seems promising. For me, the issue has been finding the right trifecta set-ups seems to push me towards stocks that I actually don't like as long term holds. So if I want to stick to stocks I like holding, the trifectas are few and far between.@@yieldcollector

[@Downsize1940]

Are you not trading on margin?

[@yieldcollector]

I trade these types of Wheel Strategy stocks in my IRA.

[@danmeyer554]

What happened to your Option Alpha videos?

[@yieldcollector]

I deleted them. I don't really use Option Alpha any more. The platform has been improved and changed so much that my videos weren't really relevant any more any ways.

[@philelmo]

Worked until I’m now stuck with TXN at $180

[@yieldcollector]

I'm currently in TXN as well. Although my cost basis is $165. You could probably sell some Calls at the $180 strike if you go out a few months.