The Wheel Strategy: Beginners Tutorial
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- Опубликовано: 6 окт 2024
- My favorite HYSA: bit.ly/4eui2Vu
In this video, I go over how to use the Wheel Strategy, specifically with Apple #AAPL, to generate monthly income.
The Wheel Strategy comes in two parts: (1) selling covered calls and (2) selling cash-secured puts.
This is by no means financial advice. Please make sure this strategy fits your risk tolerance and portfolio.
Drop your questions and video recommendations below and I'll try my best to answer them!
Hope this helps, friends! :)
-Steve
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Great explanation! I’m definitely interested in this strategy and have enough capital to make it work, but I’ve also been doing a strategy of buying on daily lows and selling on daily highs. I’ve not perfected my entrees or sales yet, but so far average 2.5% a month. Would this strategy outperform that or would it be best to refine what I’m working with?
into options trading for more than 10+ years ON & OFF. by far, few videos i watched, very good explanation on wheel strategy, pros & cons. crisp & clear. good work !
Can you make a video on how to set up a option trading journal and how to use it properly for best results ?
Probably the most useful video I have watched on options trading in the entire RUclips, just subbed and will dive in now in your channel for more !
This is the most clearly explained video on wheel strategy!👍👍👍
This is great video, well explained especially showing us step by step how the wheel works. Alot of these videos on youtube just tell you things instead of showing you step by step. Great job. You have a new subscriber.
This is an excellent presentation. Keep up the great work Steve!
i started a paper account last month and i am practicing the wheel strategy and so far in 9 trades = 9 winners = 100% win rate = total $882 profits in 3 weeks... it does work if you have patient and money to do wheels on well establish stocks that will likely never ever go bankrupt. i sold CCS puts on Tesla, Google and Amazon..
Nice! I’m guessing you’ve been selling far OTM options?
wheel strategy is successful as long it keeps generating premiums.
if u are holding on to a stock and price keeps falling, u might not be able to sell a call against it. thus a losing position.
anyway using paper money for options is unrealistic. cause you will never encounter early assignment in real life scenarios.
@@tekst3rcan you explain early call assignments?
best wheel strategy in youtube by far! thanks man
We buy stock at a low price or collect premium. Then sell at a higher price than we bought or collect premium if the price does not rise. What could go wrong?
Ahh a share which is declining will also drag premiums down for the put and the covered call as the strike price will be further out of the money.
Good video.
I appreciate your teaching. ❤
This was the best real strategy video I've seen!! Thank you for explaining it so well and then lay terms!! You have a new subscriber 😃
Awesome Video. Everything clicked for me in this one 🤙
Can you make a video on how taxes work with these options strategies ! Thanks love your videos
Explaination is good but could you do it with other platforms such as robinhood or moomoo etc? Thanks
Any video on how to pick stocks? Thank you
Love the content. You should point out the American versus European with this strategy. I started taking a 4 week class on options through Fidelity. And it was free.
Cool! Great that you’re learning a lot from Fidelity!
@@CalltoLeap keep teaching. I'm learning from your videos as well.
No one in these videos ever mentions taxes. Assuming you sell a put and get the premium does that count as income ? Is it a capital gain ? Same question on a covered call, are you putting aside some of the premium to cover future taxes once it gets assigned ? Great videos but I've never seen this addressed. Thanks.
It will be a capital gain--although taxed differently will still be lumped in with your adjusted gross income. Either short (gain occurred -365 days) or long (gain occurred +365 days) capital gain. Your tax rate would be individualized to you.
Make a video on faded decay, Pleas
Thank you.
What is a good safe dividend etf to trade the wheel on ?
How do you select the strike price?
can you explain early assignment???
wow Steve this is so good! I usually trade Indian markets, but I never understood this concept well until now :)
Thanks a lot for that. Cheers 😁
I'm glad this video explained it well, Sarav! Thanks for the support!
Thank you. Can you please make a video for poor men training too. Thank you.
now i get it. Thanks a lot Steve.
Now, do you happen to have any examples of on-going dividend like weekly income strategy?
week1, week2, week3, week4 etc.
Sure! I can talk more about the expiration date in the future.
Hi Steve, you said you would do a video on iron condor. I really like your videos and wanted to know when you will make the video.
Thanks for the video. Quick question, you used Apple as an example, is it recommended to do the wheel strategy, with more than one stock? Assuming you have enough capital.
This was great thank you
I'm a member of your training calltoleap and this video was very informative and I'm starting to get the picture. If you do not have 100 shares of a stock because you are still starting out, can you start by buying fractional shares little by little till you get a hundred shares then start selling covered calls once you have reached ownership of 100 shares?
Yes
Are monies needed to start trading puts initially
This was great. If I had a million bucks I would do this and just live off the premiums 😂
Going to try it out with a paper account for a couple months then try it with the minimum 100 shares. I’ve always been a coke stock buyer, would you recommend that stock?
Please make a video on theta decay!!
For sure! I'll definitely make it if more people ask! :)
I second that
I’ve seen a few videos where you’ve said you would maybe explain theta decay more in depth. Have you made one by chance that you could link me to?
Great info!
Love your content! Keep teaching I’m a little frightened to start but I just read another comment regarding practicing with paper account. What’s a paper account? Can I use it to practice?
Thanks! Yes! A paper trading account allows you to practice with fake digital cash first. You can get one with Moo Moo or TD Ameritrade.
Weekly sell put has more value than monthly...right???
Unit rate, yes. However, I usually like to get a higher premium to lower my cost basis more upfront.
Ok. Now talk about how taxes are affected with all these transactions. Is it all due immediately after when these contracts expired and premium collected?
You'll get a 1099 for the premiums you make in your taxable brokerage account. However, all of this is tax-free in a Roth IRA!
Thank you.
whats ur advise on how to find my passions
I would try a LOT of things. Hang out with a LOT of people. It's important to get out of your comfort zone. The more you experience, the easier it will be for you to find your Ikigai.
Can you show some of these tips on Robinhood? I love your content but it would be nice to see other apps that people use regularly as well. Please and thank you.
Thanks for the feedback. The option chains for all platforms are similar and all the option concepts are the same on all brokerages. Since I don't use Robinhood at the moment, it may be difficult for me to record a tutorial on there.
@@CalltoLeap thank you. Love the content keep it. I’ll follow the best I can. Keep the videos coming and shorts.
@@CalltoLeap RobinHood deserves everyone's respect. Since it era'd the rise of retail traders/investors and causing every broker to become retail friendly with trade prices and such
Can you make a detailed video on back door Ira?
What is a good strike point to sell/buy? Is it best to stick to certain percentage to get the wheel started?
It depends on your goal. If you don't want to sell your shares, you can choose around a delta 0.16. If you don't mind selling your shares, you can go closer NTM.
I like to watch your videos. It's helpful
Selling cash secured puts has another bonus if your broker is paying interest on cash sitting in your account. Because you'll need a large balance to cover the put you'll gain the premiums alongside interest on your collateral.
Absolutely! It’s a another pro for letting your money grow while it sits as cash.
If you ez to sell … is tat a put or a call?
Hi Steve, how come my think or swim Platform the calls and puts, I don’t see that columns on my thinkorswim, did the platform change since this video a year ago? I just opened up options this week. 🙏
Are you on mobile or PC? Anyway, you can select the columns you want to see. A quick RUclips search will show you how
Can you please make a video on theta decay
Okay!
Is there a way to trade options but not buy 100 shares? Is there like 50 shares or 10 etc ?
You can trade just the option contracts itself. However, I don't recommend this for beginners since options are leveraged securities. Every contract always controls 100 shares.
@@CalltoLeap so is futures easier to start with between futures and options ?
do you actually trade what you preach
Do premiums get taxed as ordinary income?
Thank you, how do you choose your strike prices?
It depends on your goals. If you don't want your shares called away, I like choosing deltas around 0.10. If you want the cap gains and a higher premium, you can choose a more near-the-money strike price.
Where does the premium that you receive come from? Who's money are you receiving?
It comes from the option buyer 👍
Is there any reason not to have a bunch of wheels going at once?
I usually have a couple of wheels.
Thanks for these tutorials! What do i need to do, if say, the covered call option i sold expires “worthless”? Do i need to go and “close it out” in my brokerage account or does it close out automatically once the expiration date passed with un-met strike price?
The brokerage closes it out automatically. You can always buy to close a covered call if you have made a decent profit and time is getting close to the expiration date
Purchasing a new home. Please, Thank you.
Is 100 shares a minimum for cash secure puts?
Steve is very thorough and has answered my question.
If you buy or sell a covered call, can you end the contract before the expiration date?
Yep. You can always close your contract early.
@@CalltoLeap Do I get to can keep the premium if I close the contract early?
Yes, but in order to get out of the contract, you will need to buy it back for whatever the contract is worth at the time of buy back. So u need to pay a premium to get out of it
Thanks for your vidéo. I don't understand. If you sell put at 175 and assigned you have the 100 actions. But if down at 140 you sell call at 150? You are loss money
Correct but you’re also gaining a premium of say $250. So if you own 100 stocks and are forced to sell at 150, if the stock drops to 140, you’re only TRULY losing $750 instead of $1000. Because you subtract the $250 premium you gained from the total loss.
can I sell a call and put option at high and low strike prices of the same stock if I have the cash to buy and I have stocks to sell and gain premiums from both sides at same time?
thanks 🙏
Yep! You can sell a CC and a CSP at the same time.
Quick question concerning the Sell put option : You said that the strike price of TSLA is (for instance) 175$, if it drop lower than that you are willing to buy 100 shares at 175. Does that mean you need 17 500$ (175x100) in your account? And does this act like a limit order (once it touch that level, it buy automatically, or does it wai to see the price until expiration date)? Thanks for the answer really appreciate the video :)
ditto...can the shares be forced on you to buy them earlier than the expiration or can shares be called away earlier than the expiration???
Absolutely!! You are selling a cash-secured put and if assigned (meaning you're being PUT 100 shares@175.00 of TSLA) the broker will require that you have a $17,500 cash balance in the margin account ready as collateral in case you are assigned the shares before letting you place the trade ( sell the naked put), hope this helped.
最高素晴らしい致します👍👍👍
👍👍👍
I love you very good ❤
Haha. Thank you!
Would you ever buy a put option or covered call?
I don't usually like to buy options, unless it's a LEAPS option.