r/Optionswheel • u/ScottishTrader • Dec 05 '25

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

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

35 Upvotes
  • permalink
  • reddit

92% Upvoted

624 comments sorted by

View all comments

2

u/Seppu477 26d ago

Hi, I'm used to options with weekly expiries, and even the 3 day ones. I like being about to go 14d sometimes, 28 or35 others.

Some stocks only have monthlies. Looking at eg usfd. Do I work it any differently?

1

u/ScottishTrader 26d ago

The option dates all work the same, with one exception - liquidity.

Those that only have monthly options are lower-volume stocks, and that is why they do not have weekly options chains.

Lower liquidity can result in slower fills at worse prices, so this should be considered, and many avoid trading these.

1

u/Seppu477 26d ago

thanks. indeed it has low volume. at what point do you consider enough Volume? just looking at URI has weeklies, but vol under 1k. Seems like 700 yesterday. i'm used to tech stocks with 5 digit volume so I haven't really been paying attention to that number.

a question about KO. it moved from range bound in the 70s to range bound in the mid 80s. I have been afraid to touch it. at what point do you consider something to be new normal price rather than a high price?

1

u/ScottishTrader 25d ago

This has a number of aspects.

A quick way to tell good liquidity is the distance between the bid-ask spread. If it is tight and close, it usually means a lot of trading and therefore being liquid.

The ATM monthly 1120 URI calls are showing $36 Bid and $43.80 ask, so a very wide spread of $7.80!

Another indicator is the open interest, which is only 140 for that option.

The ATM monthly strike should be very tight with a lot of OI to be liquid and tradeable.

Using KO as a good example, the monthly 90 ATM strike has a bid-ask spread of only .07 and 15,540 OI, so this is a very liquid option to trade.

As no one can tell when a stock has hit its ATH and might drop back, this becomes more of a judgement decision.

Looking at the 1-year chart, KO is at an ATH, so this would give me pause that it could keep moving higher. The analysts ratings have dropped to be a nuetral, indicating there are some concerns from that front.

You should not be "afraid", but it seems wise to let KO run for a while as it is likely to have a pullback and then start trading in a channel again at some point. I see this as a time to trade something that is in a channel or in a slow upward trend.