Insights topic
Wheel Strategy Insights
The wheel as a loop of cash-secured puts, assignment and covered calls, and the checks that each step needs before the next one.
6 articles · Updated
The wheel repeats a loop. Sell a cash-secured put, take assignment if it comes, sell covered calls on the shares, and start again once they are called away. Each step has to match the cash, shares and records the previous step left.
The articles cover the legs and the joins. One shows a covered call and a cash-secured put as the same expiration payoff from different starting points. Another shows how the two legs can turn 100 shares into 200. A third tests the rebalancing gap before a put is sold. Two more work with premium: one explains why a 30-day premium repeated twelve times is not a 24% annual plan, and one applies a retirement-income test.
A further piece looks at the shares after assignment, where a covered call can cap recovery below the purchase cost. Read together, they give you checks to run before the next leg of the loop.
All 6 articles, newest first
Worked examples use fictional figures.
- A Covered Call Can Cap Recovery Below the Stock's Purchase CostCompare a covered call after a share drawdown with the original purchase cost, and check whether the intact position can reach historical breakeven.Wealth and portfolio10 min read
- A 2% 30-Day Put Premium Does Not Create a 24% Income PlanA cash-secured-put example shows why multiplying one 30-day premium across a year leaves out assignment, changed capital and eleven future decisions.Wealth and portfolio9 min read
- A Covered Call and a Cash-Secured Put Can Turn 100 Shares Into 200Writing a call against 100 shares and a cash-secured put on the same stock can leave an investor with 200 shares after a decline. A fictional model shows the allocation result.Wealth and portfolio7 min read
- Calculate the Rebalancing Gap Before Selling the PutA $100,000 60/40 example shows when put assignment can restore an equity target and when a direct rebalance is cleaner.Wealth and portfolio8 min read
- Covered Calls and Cash-Secured Puts: Same Expiration Payoff, Different Starting PointWhen covered calls and cash-secured puts share an expiration payoff, ownership, dividends, cash and assignment still determine which trade fits.Options education9 min read
- A Retirement-Income Test for Options PremiumA covered-call example shows how to judge options premium beside total return, assignment, spending needs and tax treatment.Wealth and portfolio10 min read
Compare the first leg before you start the loop
See which strike and expiration pay best for the cash you would tie up.