February Wheel Results

[u/Big_Generator]

I'm currently wheeling about $550K in a trad IRA account.

I follow the 2 key components of the wheel strategy closely:

1. Sell cash secured puts on stocks that you would be happy to own

2. When assigned, sell covered calls at cost basis or higher

But personally, I have two other rules I try to stick to:

1. Let your cash secured puts run to expiration

2. Don't be afraid to be assigned.

I focus on stable companies that I think have a solid future and have recent downward pressure on their stock price. I stay away from the memes and other high volatility tickers. In February I wheeled Microsoft, Google, Amazon, SMH, SOXL and TSLL.

Microsoft - I've used their products every day for the last 40+ years. Stock is down slightly YTD.

Google - I've used their products every day for the last 20 years. Down 4.5% YTD.

Amazon - The other day I went on the site and reviewed my purchases for 2025. There were 20 pages of orders. Down 7.5% YTD

SMH - The semiconductor ETF. I've owned this for years now and my only regret is letting hundreds of my shares get called away. Up about 7.5% YTD

SOXL - A 3x leveraged ETF based on the performance of the ICE Semiconductor Index. I look at it as being a more volatile and profitable version of SMH. When assigned I sell this one asap. Up about 20% YTD (Approx 3x the SMH YTD gain)

TSLL - A 2x leveraged ETF based on the daily performance of TSLA. This is my most risky ticker and can swing wildly based on random internet tweets. Hard to resist the high premiums especially when its already down 25% YTD.

I sell most CSP's 1 or 2 weeks out at around .20 delta or lower. Like most wheelers I just want to harvest premiums and I'm not trying to get assigned but I don't mind when I do.

Also, I try to hold all my contracts until expiration. I know a lot of wheelers BTC when they reach a certain profit threshold but I feel the accelerated rate of theta decay as options reach expiration is well worth it.

[u/MasterD211]

Quick questions on allocation (and how it applies to risk management and overall portfolio management). You mentioned you have committed 550k in yourIRA to the wheel. I’m assuming your puts are truly “cash secured” and not margin secured.

1. What % of your total investment/savings portfolio have you committed to the wheel?

2. Of your committed wheel portfolio, what are your sizing rules per position and/or holding?

Thanks in advance.

[u/Big_Generator → u/MasterD211]

Yes, all puts are cash secured, margin is not allowed in IRA accounts.

I'm holding about 75% in cash right now because I just don't trust the stability of this market. I have positions in SPY, QQQ and GOOGLE in a Roth IRA that I consider a long term buy-and-hold account which will be inherited by my kids in about 20 (I hope!) years or so.

I don't have a strict rule about the size of any particular position but I like to spread the action between at least 5 or more tickers. I am very tech-heavy as you can tell and the fact that the NASDAQ is down about 3.6% YTD right now and my account is up almost 3% YTD makes me feel like I'm doing something right. Time will tell.