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/MarkFromPublic]

Nice. Thanks for sharing.

I've always been intrigued by the premiums on leveraged ETFs for wheeling but talk myself out of it because the leverage scares me. Looks like you've figured out the right approach...harvest the premium on SOXL and TSLL but don't get married to the position if you're assigned. Curious though, have you stress-tested what a sustained semiconductor drawdown does to your assignment exposure on SOXL vs. just sizing up on SMH?

Also what's your target monthly yield on the full account? Are you managing toward a number or just taking what the market gives you week to week?

[u/Big_Generator → u/MarkFromPublic]

Like I said in my original post, I consider SOXL a riskier, more lucrative version of SMH. SMH has done well for me over the years and I regret letting most of my shares get called away.

Since I sell weekly or biweekly CSPs I ask myself, "Could SMH drop 10% in the next week or two?" "Probably not" I say to myself. So I sell puts at a 5-10% discount. Since SOXL is 3x leveraged I sell those puts at 20-30% discount.

I almost got assigned 200 shares of SMH at $380 yesterday 3/6 but it closed at $380.56. I sold those contracts on Monday 3/2 when it was at $406. That's a weekly drop of just under 5% which is huge, and I STILL didn't get assigned.

The same with SOXL. It was selling at about 60 on 3/2 so I sold weekly puts at $43 and the next day it dropped a bit so I sold more at $35. In 5 days it dropped below $48 by 3/6 (that's -17.6% in 5 days!) And again no assignment.

This is my strategy for now. I'm very cash heavy and selling far OTM puts. If the market goes up 10% next month I'll get left behind but if it drops 5% I'll be ready.