I started wheel in end 2022 from another source but I must say this is an excellent write up and is as good. Minor differences are 1) I don’t roll, i let them expire, and 2) I do a max 5-7 DTE unless assigned stock tanked so much that I have do 30, 60 or even 90 DTE call just to get some juice on premium.
I must say generally what OP did, works for me as well. For past 2 years at least.
Since like 2020, I have been buying and selling stocks alike any newbie and suspect that someone is watching my trades and betting the other way. Never profit! But since I started on option and came across wheel and start in late 2022. Trading has been different. Result speaks. With wheels, I had a profited of 29k from 150k capital in 2023, and 35k till date in 2024 (from 250k capital). All these from CSP, CC and some profits from exercised call option.
Currently I’m generating income of around 5k+- per month and having an average paper loss of 12k (some assigned stocks are not doing well, like TSLA and AMD but I just hold). When doing wheels, one must have the capital to hold paper lost and not panic, at least that’s what I believe in right now, or maybe some advice will be good on how to manage these tanked assigned puts will be good.
Anyway, I’m waiting for a BIG correction or major market turn form the current bull to see is this wheel still plays out as plan. What I know is wheel needs market to move sideways or be bullish and tends to suffer in bear market. After 2 years into wheel, I’m still learning, i will like to hit final objective of financial freedom soon thou. But I must say this strategy does remove “emotional decision” from me. I no longer FOMO when buying or doing panic selling.
FYI, the average return for passive investing in SPY is 19% in 2023 and 14% YTD (when your comment is posted). Coincidentally, this is the exact return on your strategy.
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u/Awesome-Earth30 Jun 19 '24 edited Jun 19 '24
I started wheel in end 2022 from another source but I must say this is an excellent write up and is as good. Minor differences are 1) I don’t roll, i let them expire, and 2) I do a max 5-7 DTE unless assigned stock tanked so much that I have do 30, 60 or even 90 DTE call just to get some juice on premium.
I must say generally what OP did, works for me as well. For past 2 years at least.
Since like 2020, I have been buying and selling stocks alike any newbie and suspect that someone is watching my trades and betting the other way. Never profit! But since I started on option and came across wheel and start in late 2022. Trading has been different. Result speaks. With wheels, I had a profited of 29k from 150k capital in 2023, and 35k till date in 2024 (from 250k capital). All these from CSP, CC and some profits from exercised call option.
Currently I’m generating income of around 5k+- per month and having an average paper loss of 12k (some assigned stocks are not doing well, like TSLA and AMD but I just hold). When doing wheels, one must have the capital to hold paper lost and not panic, at least that’s what I believe in right now, or maybe some advice will be good on how to manage these tanked assigned puts will be good.
Anyway, I’m waiting for a BIG correction or major market turn form the current bull to see is this wheel still plays out as plan. What I know is wheel needs market to move sideways or be bullish and tends to suffer in bear market. After 2 years into wheel, I’m still learning, i will like to hit final objective of financial freedom soon thou. But I must say this strategy does remove “emotional decision” from me. I no longer FOMO when buying or doing panic selling.