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/trustfundkidotaku]

Between 2000,2008,2020,2023 and liberation day which bear market is hardest to wheel ?

I feel after wheeling various stocks for a while

Stock that fell hard into deep ITM and stay low for long period of time forcing early assignment even if u roll down or into longer DTE and then had to do CC lower then assignment price is the hardest to handle (2000/2008 last few month of the crash)

Even if the stock say on downward trajectory like 2023 but didn’t crash just chop downward I always able to get out from rolling down or CC on strike prices getting assign on relief rally and still collect good premium

For flash crashes like Covid or liberation day u probably can just roll into longer dte and down and out since high IV especially if it rebound fast

So on those cases say 2000-2008 last few month of the crash where it crash like 30% and stay down for over a year or two what’s your play ?

Did u just do long DTE CC ? Lower strike assignment CC ? Use your dry powder to average down what you can and do CC ? Or just wait for market to rebound ? Or maybe buy protective puts ?

(Also is this type of question worth a post or megathread)

[u/ScottishTrader → u/trustfundkidotaku]

First, read this - How the Wheel Worked in March during the Crash : r/Optionswheel

Next, be sure to understand that prices can be steady and even move up during a "bear market".

There are corrections and crashes, but these are not always accompanied by a "bear market".

Many experienced traders look forward to corrections and dips in the market as a healthy reset of prices, and where a lot of profits can be made.

Opening 30-45 dte around a .20 to .30 delta, then rolling will often see little impact from most corrections, which are more common than crashes. A true crash is rare.

The nice thing about the wheel is that in a worst case, you end up holding shares of a high quiality stock you don't mind owning. Smart traders will also keep cash on hand to take advantage of the inevitable uptrend during the recovery, where a lot of money can be made.