Wheel Options Strategy: Trades Are In Trouble! - Trading Like A Pro

[@rockwelltradingservices]

As always, I hope you're finding these videos helpful, and I hope showing you what trades I'm in is also bringing you good information. What else would you like to see me do a video on? Let me know in the comments. Recommended Videos: The Wheel Strategy Playlist: kzbin.info/aero/PLBa3sAx-Io2nosgosERUhIZwzvIgD-3Vq The PowerX Strategy Playlist: kzbin.info/aero/PLBa3sAx-Io2l9ZV4s66J-uNkG6AJvhSPB

[@gebels22]

Please discuss the pros and cons of rolling ITM puts vs. taking assignment. Lets ignore the simplicity of your default strategy.

[@marktuck7752]

yes. i was looking at assignment as a money mgmt risk as opposed to a tangential opportunity. this is a great paradigm change for me. what do you suggest for using this towards a tiny $5k account.

[@rockwelltradingservices]

HI Mark, trading a $5,000 is VERY difficult since you can't implement any "risk mitigation". As an example, I recommend that you don't risk more than 2% of your account on any given trade. But that's only $100. It will be very difficult to find trades that fit this criteria. Is there any chance you should start with $10,000?

[@TrialsHDKing]

Always love getting updates on your trades!!

[@rockwelltradingservices]

I am glad that you love it. Thank you for watching! 😊

[@benholm6672]

First off, I want to thank you for your videos and transparency. I have learned so much from watching them over the last couple of months. I am up 34% over the last (8k) month and have a new hope for me and my family. I plan to buy your software in a couple months. I am a social worker and trading is going to provide my financial freedom, not my day job.

[@rockwelltradingservices]

That is awesome! The bundle promo for the PowerX Optimizer is over but I extended it for you. Here is the link rockwell.infusionsoft.com/app/orderForms/PowerX-Optimizer?promo=cristyspecial. Use that today to get the PowerX Optimizer at a discounted price (From $2997 to $1997 only!) Plus all the perks included in our bundle offer. Look for Cristy at [e-mail] if you need assistance.

[@JigDPT]

I like these shorter videos better! Just joined the PXO group!!

[@rockwelltradingservices]

Awesome! Thank you for watching and welcome to the Rockwell Trading family! 😊

[@babyninja7307]

Would love to see this kind of video weekly. Thanks!

[@rockwelltradingservices]

Please subscribe if you haven't yet and hit the bell button to get notified when I release a video. 😊

[@deanbishop4189]

I really like your videos and how you explain everything

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@kronic1oo1]

thanks for these videos markus keep them coming

[@rockwelltradingservices]

You are welcome! I hope my videos help! 😊

[@michaelmickle9321]

Outstanding job Markus! I'm a huge fan and follower! I love The Wheel Strategy and like you I trade without fear of being assigned. It's the fabric of this strategy and I have made so much additional premium profits through the CCW side after being assigned. The stock appreciation $$'s and Call premiums play a big role in catapulting profits higher. Watching and learning from your trade management moves has provided me confidence and knowledge to manage the assigned trades forward. Awesome job! Love the attitude and mindset!

[@rockwelltradingservices]

Awesome! Thank you for watching! :) I love seeing this feedback. Cheers!

[@FinancialOptionsWithThumper]

The wheel is truly an awesome strategy. I sell puts with the wheel in mind, but I love the no assignment strategy. I can usually roll the puts out in time for a credit and still get about the same premium that you can if you take assignment of the shares and sell a covered call, but I can stay in a cash position. Have you run the no assignment strategy? And if so, how did that work for you?

[@leefader7682]

I do the same, sometimes I sell calls and sometimes I roll the puts out for more premium, they are both great.

[@rockwelltradingservices]

Yes, I have. And I make the most money when I'm selling calls. Last week, I made $15,000 in ONE week - and that's my MONTHLY goal. If I would NOT get assigned, I would not be able to achieve my goals. It's part of my strategy. When getting assigned, I usually make 60-80%. With a "no assignment strategy", I would yield 30-40%. Does this help? 👍

[@FinancialOptionsWithThumper]

@@rockwelltradingservices Yes, thanks. I love hearing about other trader's experiences.

[@rockwelltradingservices]

👏🏻 Awesome!

[@richh5392]

@@mikecleveland7453 you tubers should spend more time talking about risk but it is not sexy. If you are wheeling stocks and they collapse you are no worse off than owning the shares without options. You can always buy puts to mitigate risk

[@RConcepcion1966]

I like your style ! You don’t panic 😱 on your "bad trades”, just keep on making the money 💰 no matter what is going on. Great attitude and plan is the key , thanks and keep the videos coming, they are awesome 😎

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@a.c.bonneville189]

thanks for the video, it was very helpful! You have a good traders mindset

[@rockwelltradingservices]

😊 Thank you!

[@andrewm1167]

Calm cool and collecting 😎 Also I’ve noticed another YT trader must be watching you because he’s using your signature “good good good”. I’d take it as a compliment

[@rockwelltradingservices]

That is true, impersonation is a compliment. 😉

[@chessguy1993]

How close to the current price do you sell your strikes on a put? As close as possible to collect maximum premium and also increase your chances of getting assigned, or a few strikes out?

[@rockwelltradingservices]

Hi there, please take a look at THIS video: kzbin.info/www/bejne/e5TWdqWebqacqNU I'll explain everything in detail in that video. Does this help?

[@doctorrandy9995]

On the current wheel strategy, while there are 5 positions, each approximately $100,000, are you paying margin interest on approx $250,000 of borrowed money? I also don't see where you account for the margin interest

[@billestep6804]

You don’t use margin to sell premium. Just need the colllateral. Wouldn’t use margin until got assigned over $250k worth

[@doctorrandy9995]

@@billestep6804 Markus did get assigned on all 5 put positions, that's why he is selling covered calls on each position, hence the margin requirement. Where does he account for the margin interest??

[@rockwelltradingservices]

vvv What Billy said. The interest are less than $1,000 for the year thus far. And I make over $100k already. 😎

[@rockwelltradingservices]

Doctor Randy, as I said: Thus far I paid more in commissions than in interest fees. You can account for that with your commissions, if you want. For me, both together are less than 2% of my total profits. 👍

[@ChrisSmith-jd2dc]

Markus, your channel is an absolute diamond in the rough, when it comes to stock videos on KZbin. I have learned so much watching all videos and reading your books! Thank you for all the information and education you provide!

[@rockwelltradingservices]

Awesome! Thank you for watching! I am glad that my videos and books helped you in anyway.

[@gengen773]

hello markus can you make a vedio how to adjust your position if the stock price against you .in tastywork platform thank you

[@rockwelltradingservices]

Already done: kzbin.info/www/bejne/pWiTmX1raLGterM Let me know if this helps. 👍

[@DJ369-Miami]

What if the stock keeps going down? You will be getting close to nothing in premium at the assigned price. So what to do, close the position at a loss?

[@rockwelltradingservices]

In this case, I'll do THIS: kzbin.info/www/bejne/pWiTmX1raLGterM Let me know if this makes sense. 👍

[@DJ369-Miami]

@@rockwelltradingservices Alles klar, danke. Also wann die assigned stocks ca. 30 % runter sind dann puts unter dem preis verkaufen wo halt support zu sein scheint...

[@rockwelltradingservices]

😊 You are welcome! I am glad that this helps!

[@DJ369-Miami]

@@rockwelltradingservices I think one thing you could stress more is that one has to stay small (in proportion to your bank roll). So that even if you have a string of total losses you are still in the game. Very few get rich quick - with anything! :)

[@rockwelltradingservices]

Good point!. 👍

[@asb_rei]

Good video as usual! Do you usually sell weekly options? What about average delta of the CSP/CC?

[@rockwelltradingservices]

Yes, I usually sell weekly options. I don't really pay attention to the "delta". The "Premium per Day" is more important to me. That's why I am using the PowerX Optimizer to find the best trades. Making sense? 👍

[@christianloh1690]

Hey Markus. Thanks for putting up this video. I would like to ask why u are not selling calls for RIDE and LVS at this time. Is it because the strike price is lower than your assigned price?

[@rockwelltradingservices]

Correct: I only sell above my break even price, and right now, there's not enough premium in the calls. Making sense? 😀

[@alextan4651]

Hi Markus, this is a very helpful video. A real practical training short and sharp. By the way what is the expiry days you put on selling call or Put for these trades?

[@rockwelltradingservices]

"Alternative Investments" is correct: My maximum is 12 days. Does this help?

[@zombiedriver7442]

Markus, Do you ever fly rescue missions on your options? I’m guessing that’s why you roll your positions. Technically that’s a rescue mission. Do you ever add to a current option position to lower the overall cost basis of that option? Just wondering? Thanks as always

[@rockwelltradingservices]

I do. Here is a video I did on the topic, I hope it helps: kzbin.info/www/bejne/pWiTmX1raLGterM

[@sumoringer2209]

where the data for the option prices come from? Realtime or delayed ?

[@ebotrd]

They're pretty much real time. Maybe a 2min max delay. It's legit

[@rockwelltradingservices]

^^^ What ebotrd said: Up to 2 min delayed, not more.

[@jms4406]

Hey markus do you ever or have you done debit spreads before not that you would need to, but can be more liquid possibly? Your method works well for your account though. My dad showed me that debit spreads could be good for growing a small account maybe for your viewers? Maybe a topic to cover?

[@dangordon5658]

MARCUS, I THINK THE MUSIC IS UNNECESSAY AND DISTRACTING, FROM YOUR MELLO VOICE.

[@thomasd5488]

I think Markus is more of a premium seller than a premium buyer. With buying a debit spread you have to be right on your belief that the stock will go up (call debit spread) higher than the cost of your premium you paid, to make money. You also have to be right about the time until expiration too. With a covered call or a cash secured put, you earn that premium regardless of what the stock does.

[@rockwelltradingservices]

Nah... for me, debit spreads don't offer enough premium. I prefer "The Wheel Strategy". I don't think I could have made 100k+ this year with debit spreads.

[@jms4406]

@@rockwelltradingservices oh yeah absolutely man. Just seeing what your opinion was thanks. They definitely cap potential profits, I love the wheel strategy .

[@rockwelltradingservices]

😀👍

[@cyberdoodle7590]

genius.

[@rockwelltradingservices]

Awesome! Thank you for watching! :)

[@jasonnysacleomedes5084]

You are actually more on the worst case as the optimizer moved AA back to $0.20 a share instead of $0.21.

[@halenthal]

You keep saying the premiums will be deposited on Friday when the options expire. Don't you get the money from the premiums immediately?

[@swing_trades_setups]

Ok here is the short answer 🤑 The option price fluctuates with the change from stirke (delta), volatility (Vega) and theta is time (you like it to tick away when selling). So... The price of the call is continuously changing. You can in fact buy to close or roll if you desire (remember that if share price is pumping up then call is worth more and if share price is dropping then call is dropping in price - close to profit early but you keep diff of original premium minus close price). On last day of call, as no theta is basically left you are essentially tracking at intrinsic value remaining on the call (share price minus strike). But no matter what the call is worth at close on Friday, if you didn't buy to close, you get the premium deposited in your account, as you didn't sell. Here is the rub... If the share price went $100 a share over you strike, you only get to sell it at strike and the person who bought the call gets the shares at that price. Most people that buy calls sell to close early as they don't want assigned, as they don't have the capital to exercise (buy the shares) or they would have just bought them in the first place! Leverage for people with small accounts can pay well but if you are buying out of the money, most people will evaporate their account unless they get lucky! Remember longer theta (time) options cost more and so do at/in the money!!! What people eventually realize is you need to spend more money up front, coz you can never buy more time (only sell it) and out of the money prices in delta in order to profit (need crazy change in price).

[@halenthal]

@@swing_trades_setups I understand that, but when I sell options, the premium I receive is put into my account immediately when they're sold, not when they expire. Or is that done differently for different brokers and platforms?

[@doctorrandy9995]

@@halenthal You do receive the money immediately on the sale of your put/call. However, you did not "earn" the money (until the option expiration)or you buy back the option to close the position

[@swing_trades_setups]

@@halenthal I only trade options with Fidelity and I like how they show you your account value based on current price of the option, just like you would see the current price of your stock. This way if I BTC at any moment you know what your account is worth. So, if I were to roll up and out, it will show my account with more money based on new strike. If price of stock dipped then it may show me 60% filled of original value. But if I wake up on Saturday account will then reflect the remainder of premium...

[@halenthal]

@@swing_trades_setups TD Ameritrade does the same, and it confuses the heck out of me most of the time. Yes yes, TDA, I know that I would have to pay XXX to buy the option back, but I'm not going to do that so quit telling my my account is less than what it is :)

[@johncarilloiii7828]

Music is annoying, leave it off please.

[@rockwelltradingservices]

We are taking your feedback into consideration. 😊 Thank you!