Cash Cows on Wheels: The Wheel Strategy | #OptionsHandbook EP052
Unlike stocks that only profit from one direction, options shine because of their combination power. The Wheel Strategy is the perfect example of this.
If you’re looking for steady income while holding good stocks long term, the Wheel Strategy could be just what you need.
The Options Handbook is where this smart little strategy gets its spotlight! (Don’t miss the mini events at the end. 🎁)
▶ What is the Wheel Strategy? 🔄
The core idea is simple: First, you sell put options for instant income. If you end up buying the shares, no worries, just flip and sell covered calls for more cash.
Then simply keep the wheel spinning. Easy, clever, and oddly satisfying. You can generate income again and again.
▶ How to Run the Wheel? ⚙️
Step 1: Sell Put
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Pick a stock you'd be happy to hold for the long run.
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Sell a put at your target buy price.
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If stock price > strike → option expires worthless, you keep the cash.
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If the price dips below, you'll need to buy 100 shares at the agreed price, but don't forget, you've already pocketed a premium, so your actual cost is lower.
Step 2: Sell Covered Call
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Once you own the stock, sell a covered call to collect premium.
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If stock stays below strike → option expires, you keep shares + premium, then sell another call.
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If stock rises above strike → your shares get sold and you pocket both the premium and any gains from the share price. Wheel completed. Start again.
Step 3: Keep Running
Keep selling puts or calls, whichever stage you're at. Each sale brings in more premiums, building a steady cash flow stream.
▶ Why Use the Wheel? 💡
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Steady Cash Flow: By continuously selling options, you generate regular income regardless of market swings.
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Lower Entry Cost: Selling puts means even if assigned, your effective stock cost is reduced.
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Flexible in Any Market: If the stock goes up, you sell at a profit and collect premiums. If it goes down, you hang onto the shares and keep selling calls or even more puts. Either way, you're earning.
▶ Conclusion:The Wheel Strategy keeps the profit machine running, whether the market's climbing, dipping, or dithering.
🎉[Mini Events]🎉
How to Join
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Flip to Chapter 5 of the book and find the section about Wheel Strategy. Snap a photo and post it in the comments with your thoughts! 📸
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If you don’t have the book, just share your thoughts on this article.
Example: “The Wheel Strategy is great for traders looking to boost returns on their stock holdings or lower their cost basis. Pretty solid!”
Prizes🎁
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All valid comments or posts will receive 10 Tiger Coins
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High-quality comments or posts will receive a copy of Options Handbook or Mouse Pad
Event Period: from now → Sep 23, 2025
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- Hilliton324·09-17The Wheel Strategy sounds like a great way to generate consistent incomeLikeReport
