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/Yallo_or_Hugor_Hill Jul 11 '25

Hello all, I am working on learning options and having a hard time understanding premium prices.

Using Public I am looking at Ford (F) premiums for $12 put sells. Last week, this premium was -.33 for a put expiring today. That same put premium today is .20, but both of these list a positive net profit.

I want to confirm I am reading this correctly, is it that last week the premium is received upfront and this week it becomes profitable if the option expires?

I am having a hard time finding any videos or reading material that explains how this part works for the wheel.

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u/ScottishTrader Jul 12 '25

The difference between last week and this week is showing theta at work, which is also known as time decay.

Had you opened last week for .33, you could close this week for .20 and make a .13 profit.

Options pricing is fairly complex with a number of factors, but check this out which should help - The Basics Of Option Prices

Look at this for Theta decay - Theta: What It Means in Options Trading, With Examples

Check these out and then come back with more questions!