🧙 Wizard of the Wheel

Wheel Wizard
Strategy Builder
Learn the Wheel

Put Options

Call Options (If/When Assigned)

Options Chain Data

Puts
Calls
Strike Bid Ask Mid Premium % Delta Action
Strike Bid Ask Mid Premium % Delta Action

Strategy Builder

Drag option legs here to build your wheel strategy

Learn The Wheel Strategy

What is the Wheel Strategy?

The Wheel Strategy is a popular options trading approach that combines cash-secured puts and covered calls to generate consistent income. It's considered one of the more conservative options strategies and is often recommended for beginners.

The Three Phases of the Wheel

1
Sell Cash-Secured Puts

Start by selling put options on a stock you wouldn't mind owning. Receive premium upfront. If the stock stays above your strike price, the option expires worthless and you keep the premium.

2
Get Assigned (Sometimes)

If the stock price falls below your put strike price at expiration, you'll be assigned 100 shares per contract at your strike price. Your cost basis is reduced by the premium you received.

3
Sell Covered Calls

Now that you own the stock, sell call options against your shares. If the stock stays below your call strike, keep the premium and repeat. If the stock rises above your call strike, your shares get called away at the strike price.

Key Metrics to Watch

  • Annualized Return: The total return from premiums expressed as an annual percentage.
  • Breakeven Price: The stock price at which your strategy neither makes nor loses money.
  • Maximum Profit: The highest profit possible with your strategy.
  • Assignment Risk: The likelihood of having your put assigned (often related to delta).

Best Practices

  • Only run the wheel on stocks you actually want to own long-term.
  • Consider stocks with moderate to high IV (Implied Volatility) for better premiums.
  • Be aware of earnings announcements and other major events that could cause price swings.
  • For beginners, aim for put deltas between 0.2-0.3 (20-30% chance of assignment).
  • Select strike prices based on technical support levels when possible.