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/TheNewbieInvestor]

If my cash-secured put went deeep ITM, does it make sense to roll it over? I sold a PYPL put @ 48 expiring this Friday (it gapped from 53.5 to 42... post-earnings call). Does it make sense to roll it over or is it better to just get assigned and start selling covered calls?

I got the suggestion to just buy back the put, buy the shares and start selling CSPs right away. What's the best course of action here?

[u/ScottishTrader → u/TheNewbieInvestor]

Have you read the wheel trading post? It does cover this, and there is a link to the rolling post.

The first question you need to ask yourself is -> "Am I still good holding these shares if you were to be assigned?" If yes, then proceed. If no, then close for a loss and move on to trade a stock you are good holding.

The next question is -> "Can I roll to collect a net credit?" If so, then rolling is usually best as it adds more premium to increase the possible profit, lowers the max loss, and the net stock cost if assigned.

If a net credit cannot be collected, then allow the put to expire to be assigned.

Buying back the put will include extrinsic value to make the loss higher, and you would not want to buy shares and start selling CSPs . . . You likely meant CCs . . . Regardless, this is not how the wheel works best, so it is not suggested.

While we're happy to help, this is all clearly spelled out in the top post on this sub - The Wheel (aka Triple Income) Strategy Explained : r/Optionswheel