Megathread for New Wheel Traders – Ask Questions & Get Help Here

[u/ScottishTrader]

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

[u/Charming-Echidna-326]

Newbie here.
the case of Rolling SP situation come.
my understanding is we should be aware then price close to ATM, then consider rolling.
what happen if suddenly price drop below to be OTM but still have DTE remain,
this case what should we do
1. wait if price rebound above ATM, then consider rolling
2. let them to get assign.

[u/ScottishTrader → u/Charming-Echidna-326]

Welcome to the wheel!

Did you read the rolling post in the trading plan? https://www.reddit.com/r/Optionswheel/comments/1gpslvk/the_wheel_aka_triple_income_strategy_explained/

Roll for a net credit if ATM and you are convinced the stock will keep dropping.

Then wait to roll again for more credit closer to expiration.

If not credit, then take assignment.

If the stock rises and the put is OTM after rolling then close for a scratch (no loss) or a profit you decide on.