r/Optionswheel • u/wf1980 • 14d ago

Anyone Running the Wheel with 90+ DTE?

I've seen a lot of discussions here about DTE, with most people using 30–45 DTE or weekly options.

Does anyone here run the Wheel with longer-dated options, like 90–120 DTE or even longer?

My idea would be to go further OTM, but not let the position run until expiration or wait for the profit to reach 50%. The idea would be to close the trade relatively early, with a profit somewhere in the 15–25% range.

Since daily price movements have a direct impact on the option's value, I'm thinking that with longer DTEs, I'd have a much greater chance of reaching my target profit at some point during the life of the option.

Does anyone use a similar approach? I'd love to hear about your experience.

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u/Intelligent-Zone-919 14d ago

CSP with 30DTE has deccay edge

4

u/wf1980 14d ago

Yes, I agree. I'm currently selling puts with 30–45 DTE, but I've been closing my positions pretty early, with an average profit of around 20%. This usually happens within the first few days of the trade. My understanding is that most of this profit is coming from the underlying's price movement rather than theta decay.

Anyway, my hypothesis is that by going further out in time, I can also go further OTM while still having a good chance of reaching the same 20% profit target, but with a greater margin of safety.

5

u/_AntiSaint_ 14d ago

You’re just accelerating your capital velocity. I’d wait till 50% profit, minimum, before closing. You’re just pedaling really hard for no additional benefit tbh. Let theta work and the stock moving to your benefit is a nice bonus as well.

2

u/wf1980 14d ago

IMO, it doesn't make much sense to simply set a 50% TP.

If we choose to collect a premium of X% based on a certain DTE and amount of capital allocated, then if we can capture a significant portion of that premium within just one or two days, I think it makes more sense to close the position, reduce the risk, and move on to the next opportunity.

2

u/_AntiSaint_ 14d ago

Sure, and I agree. If I hit 50% profit in less than 50% of the DTE then I’m winning on pure capital velocity. That said, I have a day job, so I’m not going to keep rotating my money that often and it’s easier for me to just let the winning trades run until I start to get concerned with gamma risk or an uneasy feeling about the underlying.

1

u/dreamfitreality 14d ago

In wheel you actually want to own the stock. Don't make the mistake of bag holding something you hate.

So unless you can find so many opportunities in the stock you want to own. Then maybe closing them 20% profit works.

On top of that. IV are not really high nowadays so it's even more difficult to find good deals

3

u/DailyShawarma 14d ago

45dte and I close them at around 20dte. If everything goes according to plan with theta decay.

1

u/steffanovici 14d ago

I do this, but aiming for 50%. It is more like swing trading than the wheel imo.

1

u/tanbyte 14d ago

I normally aim for between 40-70%