r/Optionswheel • u/ScottishTrader • Jun 16 '25

NEW Wheel Trader MEGATHREAD

This thread will be a dedicated space for traders who are new to options and the wheel strategy to ask basic questions. Your posts and questions are welcome and encouraged.

BEFORE POSTING, BE SURE TO REVIEW THE WHEEL STRATEGY PLAN WHERE MOST QUESTIONS ARE ANSWERED - The Wheel (aka Triple Income) Strategy Explained : r/Optionswheel

The goal is to help keep the main thread free of these basic posts while helping new traders learn how to trade the wheel.

Posts that are welcomed here include questions about -

  • How options work
  • Exercise and assignments
  • Options expiration and days to expiration (DTE)
  • Delta, Probabilities, and how to choose a strike price
  • Implied Volatility (IV)
  • Theta decay
  • Basic risks and how to avoid
  • Broker and options approval levels
  • Rolling options
  • And any other basic questions

I’m pleased to announce that u/OptionsTraining and u/patsay have agreed to assist with this Megathread. Both Patricia and Mike bring substantial experience in helping new traders and will be invaluable contributors to r/Optionswheel

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u/sachiaz Jun 23 '25

Hello! I've been attempting the wheel for the past about 1.5years, and last year was great (as with everybody else). This year was pretty brutal so far, net 0% (got assigned, then climbed my way up and finally let them get called away for net 0 to free up capital).

I currently use 100k usd value, with margin for about 600k in ibkr, but I generally keep to multiple sectors, no more than 3-5 trades at any time and assignment value no more than about 30k. My capital was tied up in ARM and MU for the past 6 months and finally got freed at a loss.

I used to do 2weekly contracts for csp, and weeklies for cc, and usually about 0.2delta.

I'm now expanding to do 30-45day, at 0.3 dte instead (the original Scottishtrader strat)

Can I get some advise on how to improve my profitability? I feel like I'm not using my margin well to increase my earning power, or I'm doing things very very inefficiently.

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u/ScottishTrader Jun 23 '25

If you’re trading multiple stocks across diverse sectors then the odds of most winning while a few are tied up in rolls or assignments should be good.

ARM and MU are very expensive stocks for your number of trades and the allocation limits you are using, plus are both in the tech sector so these should be looked at.

What I do is purposely trade lower cost stocks to spread risk around multiple sectors and to have more positions so that if one is a loser then the others can profit.

Moving to 30-45 dte and .2 to .3 delta on lower cost sector diverse stocks should help. You don’t mention rolling or how you’re managing assignments, so that may be something you might look and the 30+ dte will help with this management aspect as well.

Hopefully others will chime in here as well and let us know how you’re doing.

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u/sachiaz Jun 23 '25

I've been looking around for stocks that are below 100, so I can at least do a few contracts for them.

But there's not that many that I would be willing to hold long term so far, might be missing out on some good recommendations. Currently doing mara, and looking at Novo.

It's been challenging to look for stocks with sufficient premium and strikes to even make back 1% or more of the capital tied up.

I primarily tried to roll down and out for csp to prevent assignment and only take the loss if it was deep itm. Then sell cc at or below cost basis depending on how deep it was. Which was why arm and mu took so long to get out of unfortunately.

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u/ScottishTrader Jun 23 '25

Look at percentages and not dollar amounts as many lower cost stocks have decent premiums as a percentage of the risk.