How to Trade the Wheel Strategy
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- Опубликовано: 29 сен 2024
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Spreadsheet: docs.google.com/spreadsheets/d/1RXNUa8-n6r06CdTCt5PxWqoMp6q1ZSZJGEicoP-pGeA/copy#gid=648757628
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There are a few parts where the audio cuts out. Sorry! Nothing of importance is missing.
In addition, I advise that you only trade this in a tax-protected account like an IRA. Your premiums will get destroyed when tax season comes around if you trade the wheel in an individual brokerage account. Robinhood is releasing those now which you should take advantage of if you use RH. Max those contributions baby.
Thank you so much!
So wait a minute, if I sell a cash-secured put at the beginning of the week with a premium of $200 and by the end of the week that premium has gone down do I still get the $200 premium?
When you say your put expires worthless do you mean that you don't get a premium because it's too far out of the money? Basically is there any situation where you won't get a premium?
You are amazing, thanx for the excel sheet. Do u hv one for spreads too??
@@darkmxhishot7475 Yes you get to keep your Premium NO MATTER WHAT. If the world was coming to an end and every one sold EVERYTHING in the market to exit, you would STILL have/keep that $200 premium. I pull out my premiums when i can to help pay bills/debt.
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I invest with Mrs Amber Rebecca too, she charges a 20%commission on profit made after every trading session which is fair compare to the effort she put in to make huge profits.
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nice video, but where are you getting $5.00 credit on $25.00 underlying with 30-45 DTE with a 30 Delta? thanks
Good Wheels Vid. I do kind of the same, Except don't roll. Do weekly or few weeks depending. Once I hit 76% profit. BTC & keep cash liquid. Find another Put. Haven't got assigned yet. Like to keep buying power freedom for more puts. Markets been crazy. Thinking about trying vertical put spreads. Spread out over 10 points. Can't stay away from the juicy premiums. Hope I can try different strategies... Because I can't help to buy back before assignment. Even though the cash covered puts. Just worried we're in a bubble
Hey, man. I love your videos, but I was hoping I could ask a question about your Wheel Strategy.
I was thinking about doing the Wheel Strategy, but on a weekly basis. My plan was to sell cash covered puts on a weekly basis, roll out when possible, and then essentially repeat the process with covered calls when I'm eventually assigned.
However, I have heard doing cash covered puts and covered calls on a weekly basis is ill advised. Is there a reason for this? I understand time decay is not as powerful, but based on the pure price of premium, I can potentially make more money if I sell contracts for premium on a weekly basis rather than a monthly basis.
Did you ever get an answer to this question? I'm wondering the same thing myself.
@@twig1777 I did not, but as I've started trading more I understand why it's a bad idea now. The whole reason for the Wheel Strategy is to place time decay in your favor.
A week simply isn't enough time to fully take advantage of that, so you'll be completely reliant on a large price movement in your favor. However, if you use these on a monthly basis, your time decay has more time to decrease the price of the contract allowing for you to buy it back at a much lower price by the end of the month ( assuming the stock price behaved as anticipated, of course).
This is exactly what I needed, I'm trying to get into the game
I love this strategy! I switched over to it and haven’t looked back since.
Anvar have you been successful so far? and how long?...i've lost my entire account 4 times now..sooo i
definitely need a new strategy. lol
@@monkayspunker4123 ive been doing it for about 2 months now. On fridays I sell 10 covered calls 1 week out above my cost basis. I do this on AAPL and AAL. AAL yields the highest returns. I use 7k of my own cash and the rest on margin. It works really well. About $400-500 a week currently on my 7k account.
Also check out KamikazeCash tutorial on the wheel, it’s way simpler than this one, it just doesn’t include rolling.
@@fortmyersdrones ok thanks!
@@fortmyersdrones how would you buy 100 shares of AAPL, provided you're using 7k with some margin? Unless you mean AAL?
@@johnprice3593 100 shares of AAPL are $12,000. I have 7k of cash and 7k in margin, totalling 14k of buying power. So I can buy 100 shares of AAPL and sell a covered call. You just can't use margin to sell cash secured puts unfortunately.
Dude you have an amazing channel! Thank you so much
How do you pick your stocks to begin your wheel?
Like the video's but one important factor you're leaving out when figuring cost basis is that the credit you will receive for selling the covered call will drop your cost basis below the strike of $19, if of course the credit is over $1.00
Excellent videos on the wheel strategy and nice spreadsheet. Once you are done with the whole process and you are flat, do you erase all the data on your spread sheet and start over, create a new tab or something else?
If all the positions are closed then yes. Otherwise it can risk averaging the closed positions and open positions and mask the real trade data. Overall however, your entire P/L portfolio is averaged. It just won't really help on the open Wheel if there's old closed data and makes for a very messy sheet
does this work for bullish stocks only?
i have always wondered this question, how do i determine what the contract premium price /limit price is after hours on robinhood. For example i had a 425 C 10/30 on TSLA before the market closed and it shot up to 436. i would like to know how to set that limit price.
Mind blowing 🤯 teaching skills 👌
@InTheMoney gotta try harder than that buddy
Yea, extremely talented teacher.
I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel! I would really appreciate it!!
You have a natural talent for teaching this stuff and having it make sense so easily. Thank you for your videos!
Agree, I don't know what he does for a living, but he should be a financial advisor. A great advisor is a great teacher.
@@ViperST989 he works at AT&T call center.
I disagree
Nothing is natural this man prob self taught like many of us
HELL NO, he sucks at explaining this strategy lol
I know why you say to sell with 30 - 45 DTE, but why not just sell a weekly every week over the same 4-6 weeks and bring in 1.5-3 times as much premium for the same time? Plus you get higher theta the whole time.
I don’t comment much, however I wanted to tell you how much I enjoyed your explanation. I have been researching options trading and it seems to me that everyone want to give you just enough information then throws in a sales pitch to get the rest of the strategy. Thank you!
You can sell your covered calls at a strike a little below your cost basis if the premium of the call is big enough to cover the difference
Valid point except that whatever you sell above your cost basis will be your overall profit. So even if the premium covers the difference, you'd end the wheel at break-even. No bueno. The further you can sell the call above your cost basis, the larger profit you receive.
This is why you don't want to get assigned your puts with the wheel, because with your puts there is no obligation to sell at a certain strike to maintain profitability. They are simply used to lower your cost basis so when you reach the point of selling covered calls, your cost basis is so low that you can easily sell a covered call well above your cost basis for a profit.
In other words, all that matters in the end is how far above your cost basis you sell your call. That's what determines your profit. Doesn't matter about all the premiums you've collected. If you don't sell above your cost basis, or if the premium you receive for the CC isn't above your cost basis, you won't end with a profit even with all of your hard work. All those CSPs will have been a waste of time.
Always sell above your cost basis so you secure a nice bag. If you can't for a good premium, just hold the stock and sell super far OTM cc's.
Why would you sell at cost basis? You are just undoing all the work you did by selling all the calls/ puts
But shouldn't that premium already be included in the adjusted cost basis though?
@@historry9323 Do your math from a full account and write it out line by line...
Example:
Starting balance 100k
CSP 500.00
Etc
Yes, I've done that with covered calls in a market where the underlying was still trending down. Calculate the premium you'll receive for selling the covered call against your current basis to determine your new adjusted basis, then choose a strike above that new adjusted basis. On some calls, I simply wanted to get out of the position all together, while on others I wanted to reduce the cost basis during the recent downturn and volatility in the market on bank and airline stocks during Coronavirus era. Having these numbers in black and white on paper really helps you evaluate which Strike to choose on the covered call.
damn and people are charging money to teach this strat, thanks again boss man
DUDE!! I love your no fluff, all info way of explaining to us. You are a rock star. Please dont change!! Keep teaching, you are wonderful!!
I trade with baccarat live much better and faster... have a look to my baccarat live videos enjoy
So if i hold till expired I'll just get premium and not stock?
Jezz we are so fortunate nobody teach this things at school lol Imagine the competition
Shit, they didn't even teaching this in College. I was a finance/accounting double major and no corporate investment theory class even touched on this.
@@jerseyse410 there's a reason why the education system is useless
for real
@@jerseyse410 Makes me even more excited to use this lol
@@jerseyse410 you should have had a class on derivatives as a finance major. I know they do at colleges like Fordham University and Baruch College in Manhattan. I learned all this as a math major tho. That’s where you really get into the mathematics of how options pricing works and the mathematics of all these strategies and hedging positions.
Question.. if i am doing a spreadsheet. Should u be doing one for each security that i am wheeling?
Bruh so many bots in the comments
If you wanted to do the wheel strategy as your primary trading strategy, would you dedicate your entire portfolio to it, or maybe like 75%, then use the other 25% for whatever?
Check out his last video from about 2 weeks ago. It kinda goes thru that.
I absolutely promise anyone, Ive learned more the first 3.5 minutes of this video than over a year of research. Like I know what he's talking about but the simplicity is beautifully done and makes total sense. Time to go loose all my money on the wheel strat 😂😂👊
I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel. I would really appreciate it!!
Adam, you are an amazing teacher, you make this so easy to understand for me. I started knowing nothing about options a few months ago, and now I feel that I am semi competent. I recently opened a position and am using this wheel strategy. It's great! Thanks!
Do let us know if you make profits and how much please
In the top of the spreadsheet I edited it to have a link to this video so if I forget how to do something I can just click the link and follow this video. You may want to edit yours to come that way when people download it. Thank you so much making your content!
Good idea! Definitely going to do the same
This is a great explanation, but I think it presents the wheel strategy as needlessly complex. It’s really a 4-step process, because there is no need to roll forward.
Exactly. It’s so much simpler than this.
1. Sell CSPut
2. Let expire OR btc if profitable
3. Repeat
If assigned shares, step 4
4. Sell CCall
5. Let expire ITM OR OTM, OR btc if profitable
6. If ITM, go to step 1. If OTM, step 4
@@kevinVersus You would roll if you have an idea if the market is bearish or bullish. If you think the stock still has a lot of downside then keep rolling to get more profit and this also reduces ur cost basis. It's just an enhancement step.
OMG NOO!!!! There is a small piece of bad advice in this video, please make your viewers aware of this, as it is crucial.
The "cost basis" is figured for ZERO profit. Let me explain, if you sell CSP for 2, then roll for 0.50, then get assigned at 25, your cost basis is, in fact, 22.50...HOWEVER, if you sell a CC at 23 because "it has to be above your cost basis" then you are reducing your profit to 0.50 (plus whatever you will make on the CC) and you lose the 2.00 from the initial CSP. Let's run through a scenario with your spreadsheet:
CSP 2.00, BTC 2.50
CSP 3.00, Assigned 25.00 (cost basis 22.50)
CC23 1.00, BTC 0.05 (cost basis 21.55, let's pretend stock keeps falling)
CC22 1.00, BTC 0.10 (cost basis 20.65)
CC21 0.80, BTC 0.10 (cost basis 19.95)
CC20 0.50, Assigned 20.00
Even though you sold 8.30 worth of assets and only incurred 2.50 in liabilities, you bought shares at 25 and sold at 20, taking a 5.00 loss. Your total profit is only 0.55, which is the difference between your final cost basis (19.95) and your final CC strike (20) plus your final CC price (0.50). ALL of your other work is negated because your calculation doesn't take ANY money out for a "rake" (profit to your pocket for the transaction).
Also, N7 calculation is assuming 100 shares, which isn't a good thing when you are allowing any number of shares in the sheet in other areas, which can confuse new people.
Personally, I prefer to sell the same strike price (or higher) that I was assigned when the CSP hit, regardless of cost basis. I will only sell as early as possible, no more than 6 months away, and it has to return a minimum of 0.025% of the strike per day I have to hold (9%+ APR). If I can't, then I will look to do a call-spread reduction factor to get out of the position for the same profit potential. For example:
I'm assigned 100 shares of F at $10, nothing looks promising at 10 strike for Calls. If I sell the 8/9 Call spread, I can collect $21, and if the stock goes up, I sell however many shares to make up the difference of the loss (so if it goes to 8.50, then I "lose" $29, so I sell 4 shares to collect 34). I keep selling spreads until I can get rid of the position entirely. This is a rarity though, usually the first time I sell a spread, the price normalizes back up and I close the spread and sell a CC further out and at the proper value for just a pinch.
A new cell was added a few hours ago to correct for N7’s calculation.
You’re right, cost basis is for 0 P/L. So selling a cc with, for example, a strike one point above your cost basis would result in giving up a lot of hard work if you get assigned. That’s where the idea of “avoiding assignment and rolling your position” helps beginners avoid being assigned at a price that is not preferable. If you follow “avoid & roll”, you will continually roll your strike up as the stock rises in value. When you do eventually get assigned, it will hopefully be WELL above your cost basis.
So if you follow these rules:
1) always sell CC’s above your adjusted cost basis
2) Always try to avoid assignment and roll your position when necessary
The results are:
1) You never go through one cycle and end with a realized loss
2) You will likely sell your shares (when your CC is assigned) well above your adjusted cost basis.
For these reasons, I do not believe I made an error in this video. Of course there is more to study and hone in when it comes to this strategy, but I do not believe a gave misinformation.
I was literally just researching this and I happened to find this video before it's even properly up, dang
@@pascalfrancisco8795 Yeah sounds legit
When you asked "What is the first step" and said "You, DONUT in the front, I literally thought you were talking directly to me LOL. Cool strategy, thanks for this video!
lol, thanks!
Is it best to do this strategy with a stock that:
1. Is extremely stable in price with small tight fluctuations.
2. Stable in price with larger fluctuations.
3. Steady gaining (like Microsoft or Google)
4. Steady declining
What if you sell a PUT contract on say, APPLE (AAPL), at the $140 strike price, but the stock falls through, all the way down to $120? Remember, you can't force the market to assign to you immediately. The only guaranteed assignment is at expiration. More damage can happen along the way. Now you can be forced to pay $140 for a $120 stock. Painful.
I definitely found my favorite stock market strategy with the wheel.
I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel! I would really appreciate it!!
Hey, thats a pretty cool shirt.
Your right, It is a cool shirt
One with Kief
Ditto
@@pascalfrancisco8795 The world is really changing indeed, everyone wants to earn via trading now, am beginning to think am being left behind
This is exactly where my brain went after watching the selling csp video. I originally was just going to do covered calls but this seems much more useful
Thanks for this video, was super helpful and informative. One thing I’m a little confused on is why you would prefer to sell puts 30-45 days out. I understand theta decay ramps up, but doesnt it ramp up throughout the contract? Wouldnt selling weekly puts be better as 1) there’s less time for the option to become in the money and 2) you wont have your collateral locked up as long and can continue to start step 1 over and over.
Any help would be appreciated, thanks!
Im no expert but when you sell a contract that's further out you receive more premium
Just starting to learn about options and I'm so glad to have come across your videos. I like the fact that you get straight to the point and explain it all in simple terms which makes it easy to understand. Thank you so much for sharing your knowledge. My prayers for God's continued blessings over your life:)
I love your content. I started to trade options based on what I learned from your channel. Thanks for providing so much value!
What pen tablet do you have?
I'd also like to know if possible. I teach 8th grade math and would love to have this.
Adam you have literally changed my life with these videos. I am confidently trading the wheel strategy every week! Thank you so much for all the amazing videos!!!
Soooo.. Have you been profitable ? :p
@@maxouw007 Yes, i am averaging 3-5% a week! some weeks being a lttle less (around 2%) but making money none the less.
Have you been assigned yet? Seems that you would want to be assigned as the premiums are better on the call side. Not to mention the profit you would make on the difference between ur put cost and the call strike.
Hey man! How's it going? Still trading the wheel? How was the performance?
@@MarkVank great! Pulled 87% this year! Learned ALOT! Trade way smarter with the wheel now. But 87% I am extremely happy with!
Is the wheel strategy still good with a shorter time frame ie: 1 week out?!?
You’re a good man! Thanks for this INVALUABLE knowledge.
Instruction unclear, I owe my bank 2 goats.
Hey, you say premium received from csp and covered calls reduce your cost basis, but in your example you don’t add the premium from the covered call to reduced the cost basis.
$500 premium reduces cost basis from $25 per share to $20 per share. Selling a covered call at $19 strike price will also bring in a premium to further reduce your cost basis from $20 but you make no mention of that, you simply keep the cost basis at $20. I get that choosing a lower strike price to sell the covered call will run the risk of making a loss or just merely breaking even, but it’d be more coherent if you didn’t exclude that premium.
You’re correct, I think I gloss over that when selling a covered call in the spreadsheet, too. My b
@@InTheMoneyAdam
Also, selling an ITM CC will have Intrinsic Value, plus a little bit of time decay. It's not as profitable from a theta perspective, but it offers better downside protection, and does have a use case. I do understand this is a very general video though, and not getting to into the weeds on strike selection strategy.
What if after beeing assigned for CSP , stock keeps plumbing and CC above your cost basis are very OTM. you exit the strategy selling the stock and taking loss?
I'm just here for that T-Shirt!!! Let's go!!
I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel! I would really appreciate it!!
Okay only question i have, not sure if i missed this in the video or any of the last ones, but on cc when assigned do you keep premium? thank you
I'm a fan of my weekly premiums..30 to 45 days out is no go for me
i only do weeklies too
Yep time decay is your friend the shorter the better.
Longer expirations allow for to much to happen!
How much can you make with weeklies?
Dude! This is what I’ve been waiting for. I’ve watched all your videos and have already started trading. You are so much more entertaining and educational than the other stock youtubers. Keep up the awesome man. Thank you!
Would you consider the wheel strategy the easiest options strategy to manage overall? I'm starting a 9-5 and I don't wanna give up options but I don't see many opportunities to check positions during work so it'll all have to be automated
You've made learning options super easy. Thank you! How do you fill out the spreadsheet if you're running more than one wheel strategy at once? You may have multiple actions in between getting assigned or closing your position.
Because of the formulas in the document, you cannot have more than one wheel at a time on the spreadsheet.. So just copy and paste a new tab in the document and have one tab per wheel.
I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel! I would really appreciate it!!
I’m really surprised anyone even talks about the wheel strategy. It can destroy you if the market goes south. Just my two cents. Thank you for the info
I'm curious how you learned all of this?
was waiting for this, good stuff!! how would you manage/protect against the situation where the shares you get assigned from a CSP fall to the point where you're not able to sell above your cost basis for much of a premium? i.e. how to not be left bagholding lol, and is this something that happens often at all when employing this strategy
This is basically the only risk of the wheel, and the reason that you really only want to wheel with a company that you’re comfortable owning. (And are confident will continue to grow and at -some point- be worth more than what you paid when assigned)
@@boomerrawlings makes sense, was thinking of also hedging with a put for that scenario
If I collect a $100 premium and close that position later for $5 do I still get taxed for the full $100? can I claim the $5 as a loss? Thanks
I've been doing this for years. I didn't know it had a name. I call it my "windshield wiper" strategy.
Crunching the numbers on paper, it seems this wheel strategy could be nice consistent monthly income. Does your previous "windshield wiper" strategy results agree?
@@ChuckTate77 Hell yes. That is one of my main strategies.
@@johncalvo1743 never ran this strategy and I’ve got about $2500 to do this. I Just don’t know what stock I would want to keep... so many good ones. Lol thanks for the reply
@@ChuckTate77 Right now I am doing this with DAL, AAPL, BAC, and DFS.
@@ChuckTate77 I look for stonks with a favorable P/E ratio.
If you looking at the 30-45 days to expiration why not instead write 4-6 weekly options instead. Since if you add up all the premium/day, it would always be more on several weekly's than a single longer term option
Thank you. Learning a lot. Do you have any suggested resources for understanding taxes with gains and potentially limiting them? Like transferring into retirement as an example?
Hey so I understand we never wanna sell a covered call under our cost basis, in your example $20 was cost and the $19 covered call wouldn’t work. But what if the premium/credit received for selling that call was let’s say $3.00. Wouldn’t our cost basis now be $17 per share and thus making the $19 covered call ok? Because we would still be above our cost basis? Sorry if I missed or understood anything but I’m just really curious about my above example. Thanks!
Just wanted to chime in and say thanks for explaining things with such clarity. I thought it might be a good idea to have a commissions column in the excel spreadsheet because they do add up and I think if people are already taking the time to track their cost basis what is adding another number going to do.
To anybody who's reading this, I pray that whatever is hurting you or whatever you are constantly stressing about gets better. May the dark thoughts, the overthinking, and the doubt exit your mind. May clarity replace confusion. May peace and calmness fill your life. ❤
What would you say about a simplified wheel strategy for beginners to this strategy?
If you remove rolling your positions and let positions close themselves it could simplify the strategy and allow beginners to familiarize themselves with the strategy and create the good habits.
Later they can look to build on their knowledge basis and add in rolling positions.
Thoughts?
Rolling your option sounds more complicated than what it really is. A few brokers even have a "roll option" button and once you pick your strike/date, they will do all of the rolling for you.
@@ChuckTate77 Which brokers do that?
@@MrMountain707 I believe it was TastyTrade that had the rolling option button. I’ve have since quit using them but that’s who I was using when I watched this video.
Question: I have a stock assigned at $30, so I'll sell the call at$30. What happens if the calls expires at $31. Will I make that $1 increase from the stock that I've got assigned at $30? Or the expiring option strike at $30 will take it away from me? Thx
I have 100 shares of something. I sold my first (share secured) call. I learned in this video, I don't have to wait for it to expire. I can buy to close it. Wow, mind blown!
What do you mean? You have to
Wait until the contract expires don’t you?
@@APG103House no, you can “buy to close” the position. You sell the contract and you can then buy it back at a much lower price, or you can wait for it to expire. I would recommend buying to close all positions, even if on the day of expiry - there is a chance after market can blow up and you could get exercised.
I used to think I had to wait till expiry. But I don't. I can buy to close. Then I can resell to a later date. That is rolling it back as I understand it.
@@1Poiuytgfdsa1 you loose money by buying lower ?
I thought you had to wait for expiration when selling CCs. I lost 100 shares of NIO because I didn't know this.
Can you create a video explaining and executing a 'covered strangle'? Makes things juicy-er! Thx. (And more burp videos. LOL)
Hey thats an amazing shirt where did you get it?
Found it in a dumpster out back
I thought Delta was the measure of the relationship the option moved vs the stock? Like .30 would mean if the underlying moves $1 to option moves .30?
Take a shot for every time he says “cost basis.”
I'm against alcohol poisoning lol!
Why not sell with even shorter time periods... 2 weeks for example
Also, bear in mind, the IRS has a different view of what cost basis is.
I may be wrong but I believe he mentioned better thetas on longer expirations, so collect a higher premium on a 30 day expiration then you can roll your contract early for $.01 instead of waiting the full month.
I'll add that currently an Apple .3 delta put premium on 12/18 is $1.30, while 12/31 is $1.85. Obviously the 12/18 is a better adjusted return but maybe it's different for covered calls?
@@brockbah2048 ? Your thetas are always better with less time remaining, are they not? I re-read your post and you may be right with an opportunity for an earlier roll rather than going down to expiry or even down to 0.05
@@theccpisaparasite8813 I think you're right, except for with high volatility stocks like Tesla. It seems the premiums go up exponentially the further out you go
@@brockbah2048 actually, the high volatility high dollar stocks are my favorite. You can write puts way out of the money and still make good premium and if it gets exercised, so what? You end up owning a stock you sort of like for a pretty good price ... that you immediately start writing calls on. Granted, it doesn't always work out ... as I found out this morning (pre-market) with Qualcomm ... when Apple just announced they were going to dump QCOM as their main chip supplier and bring it in-house. That hurt as they are down 8% as of this post. ... yeah, that hurt. Every now and again something can just nail you.
Then again it deals with account size. To write a CSP on something like TTD, is going to tie up $85,000 in cash/margin.
For me, writing a put that 1-1.5 standard deviations out is good. I like writing the short times because theta wipes the out pretty quickly. In my experience, writing 2-3 short term puts, instead one 6 week put nets out more premium. Each option is for less premium, but you can write more of them which nets out to more return on the same 'margins. That being said, I'm no expert and have made some bad errors on the way.
The only way you loose money is when you are assigned in CSP and the stock price goes down dramatically.. Coz your adjusted cost will be higer and it will get difficult to sell cc for that adjusted price...
Pattern recognition, stock picking, when to buy or sell, entry and exit points? A few must knows for every newbie before getting around to placing a trade, Don't rush the process. I started profiting from the market when I discovered a better and more effective way to trade and make money. I'll be on to seven figures by years end. Kudos
Well all my efforts have gone downhill I tried to trade on demo account, could you elaborate on how you've been making profit, I don't really understand most stuff I see on trading apps but i am definitely interested in making money, I need a better way to trade and profit
Truth is although my portfolio is stable and profitable I can't say I've put a lot of work by myself into it, on my own I could barely keep up with the changes, crashes and fluctuations, I do my trades with a licensed and Bloomberg recognized broker Mr Noud Mika, he handles my trade affairs and profits for me affording the opportunity to learn and earn comfortably. I met noud through his webpage and I had him navigate my account through the EV and pharmaceutical surge and he made a comfortable $500k off them. Since then his been at the helm of my trade affairs
You make it sound easy. I've been trading for a while and coming across licensed pros from a good source like this isn't easy you know. Some rich folks hide the source of the success. I won't pass up the opportunity, Is Mr Mika available to new investors? How can I contact him?
His mail is
@
BS
If I've collected $300 premium for Cash Covered Put , what do you mean by it would worth a penny/dollar closer to the expiration date ? Does that mean my premium of $300 collected will decrease over time ?
I assume this strategy works the best with highly liquid option stocks.
Indeed, can't down/up and out if there is no liquidity.
@@heruilin you don’t need volatility when you have theta working for you
I am newer, but I like to buy 100 shares of a stock and sell a covered call at higher strike. If it hits strike, then I also gain on the shares I bought lower. If it doesn't I just sell another call the next week. Is this bad or mediocre? I get roughly $100 a week on one call, and just buy back in if it is assigned.
The rich stay rich by spending like the poor and investing without stopping then the poor stay poor by spending like the rich yet not investing like the rich.
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Investing in crypto is the only chance of making money
People are scared of investing because of the high rate of scam in the business
Mr Thomas Roger is obviously the best, I invested $3,000 and he made profit of $28,000 for me just in 15days
His success story is everywhere
I'm not sure I completely agree that you never want to sell a Covered Call below your cost basis, not only can you use the loss for tax purposes, but the premium can sometimes make it an overall gain on the position.
GREAT CONTENT. I'm an older person getting into options trading. Absolutely love this fantastic teaching. Thank you 🙏🏼
I'm right with you. Hope its going well.
I made a really nice trading journal in excel with filters and charts for analysis, if you want to take a look its the only video of my channel. Maybe drop a suggestion or anything you didnt like, I would really appreciate it!!
I’ve been running the wheel strat for almost 6 months. Yielded 27% in profit (premiums). I’m a little iffy about selling calls at the adjusted cost strike price- you are wiping away your gains. I prefer to keep rolling and maneuvering and even averaging down my price (via ITM puts!) to get out of crappy positions.
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless.
The key to big returns is not big moving stocks. It's managing risk to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.
Agreed. I've traded for several months. I barely knew anything about the markets when I started but recently, a friend advised I get a financial advisor that has good experience. I did and things changed. My portfolio grew by 150% in 8 months. How was she able to achieve that? She invested my money in reputable companies which their stocks must always rise after any dip.
Hello Dev,
I’ll recommend Tamara Diane Hagan for you, her strategies is working for me for months now and I’m making good profit from the stock market and she's 100% honest, reputable and trustworthy
Run a search with her name online, she's a registered broker.
I think what Helen is saying buy stocks and cost dollar average over time your portfolio will perform regardless which way the market will move because inflation, GDP will rise. In Capitalism our economy runs on debt the more lives in America the more debt we will accrue.
What do you do if the price of a stock drops which leaves you getting assigned on your CSP and then the price of the stock keeps falling. If the stock drops too much you’re not going to be able to receive a decent credit selling CC above your cost basis
I feel like everyone is taking about this strategy, anyone else?
I agree
This is what u do when u have the money to own shares u don't take the risks. U make the guaranteed money. But the more u have the more profit u make u can stager ur secure puts if u had enough to buy 500 apple shares u can go 2dollars 4 dollar 6 dollars 7 8 otm obviously the 2 otm ull collect more but all 5 together will add up.. or we can leave money in the bank make nothing. Most importantly what he said make sure its a stock near bottom and u don't mind owning.. never do it in a stock at all time high might be risky for a sell off.. Goodluck
I literally just made the steps to start wheel trading Netflix haha. Life is scary.
@@afa304 Netflix can go up and down 30 dollars dont buy close to share price..go otm
Only valid if you want to own the stock, which mean you think the stock will goes up eventually, which means it is in the uptrend. The wheel strategy is not working in my view on a downtrend stock, which you may not be able to cc the stock assigned above the short put assigned price.
The problem I have seen with this strategy is actually finding enough 'good' stocks that I'd want to own and that have an affordable price for cash secured puts. Lots of the popular stocks / ETF's that have good option premiums and volume trade for several hundred dollars a share, which is too high for cash secured puts (how many people can afford 100 shares of Apple as part of a well diversified portfolio for example?). The other problem with this strategy, is that you have to feel comfortable owning volatile stocks. You're not going to get any worthwhile premium selling puts against a safe, dividend paying company like Coca Cola etc. You're ultimately taking a risk then to get a decent premium against a more volatile stock like Virgin Galactic or Draft Kings for example. These stocks could tank at any time and you will be stuck with an unrealised loss for a very long time if that happens.
all of these strat don;t work unless you have 1+ mil in an account,and its still not the best income.... just sell leap covered calls then re-invest the premium into other dividend stock/etf rinse and repeat. better yearly compounding.
Nio,plug,plantar just name few good companies with good premiums, and u can own 100 shares at good prices
@@sulaymanbarrow7369 it depends on what your definition of a 'good stock' is. The stocks you mentioned are volatile so you'll get a good premium selling puts, but you could easily get assigned at a high cost basis if the stock suddenly drops. You won't be able to sell covered calls after assignment unless you wait and hope that the stock price recovers reasonably quickly. There's no guarantee that it will.
@@jkk20 interesting. I'll have to look into that strategy a bit more. Thanks
@@sulaymanbarrow7369 nio isnt a good stock.. neither is palantir.... just build enough wealth to own 100 shares of a highly liquid options stock. and sell leap covered calls. out of the money of course. so easy. because calls are rarely exercised that far away from expiry thus giving you plenty of time to accrue dividend all the while letting the premium accrue dividend from reinvestment,of course pay attention to tax liabilities,unless you are investing from a registered account,in wich case it will come later down the line.
New subscriber to your channel! Great content! This strategy amazing! I just started doing the options wheel today on a larger scale. I made $1700 in premiums from just $12K collateral. That is 14% ROI. My collateral will be released Fri 9/10/21 so then I can rinse and repeat.
Nice video , Stock investment is profitable everyday and investors are making good profits but its never too late to invest in stock
As a starter you can't do without a genuine and trusted trading services to help make profits within a short period of time
Thanks for the recommendation, how can I contact her?
You can message mrs Sophia Mia on Whats App
+13238430345
Okay , I was almost dropping her number
Great video on a subject that can be hard to digest. You made it very easy to follow and understand. Thank you
“Just have fun” yesss
Great video. But why not do this with weeklies? I think in your example, you did 30 to 40 days out, what is the reason for this?
While you're collecting all this chump change from selling puts and calls, there's the very real possibility of loss in value of the stock after you acquire it via put or loss in value of the stock while it's covering a call. At least this "wheel" strategy isn't going to blow up your account or your life savings like a credit spread where only one leg gets assigned during after-hours trading. (Assignment during after-hours trading can happen any day that options trade, not just on expiration day.)
This is why you only sell puts on stocks or ETFs that you would like to own. It’s possible a stock could drop huge and you could be assigned and stuck with a falling knife. Although, if you sell the put on a stock you don’t mind owning then you should believe that the stock is going to increase in the near future. But I do agree it’s a risk you have to take
You don't seem to like credit spreads, short puts nor covered calls, what strategy do you like?
@@robdoesweather6758 yup, actually liking and wanting to own the stock is the most important detail of the wheel.
@@Putseller100 I like buying a call or a put when a breakout opportunity appears on a daily price chart. I look for triangles, wedges, rectangles, support and resistance, and channels to identify breakout opportunities, stop loss levels, and profit-taking targets. It's not unusual for my option to double in value. All you have to do is know how to analyze a price chart. If your profit:loss ratio is 1:1, only half your trades need to be successful in order to breakeven. These are swing trades lasting 1-5 days, but often closed out the next morning shortly after the open. I usually do these trades with SPX options or SPY options with 1-2 weeks until expiration, and I'm not at all shy about buying OTM options. Breakouts from triangles usually resolve within a matter of a day or two, and the target can be predicted by technical analysis.
You risk thousands of dollars on a credit spread, covered call or covered put just to collect a $50 credit. If you day trade ES eMini S&P 500 futures contracts, you can easily scalp $50 per contract in a matter of seconds, risking only about a hundred dollars (you limit the risk with a stop loss order) per contract using a scalping strategy that has a very high success rate. The day trade "margin" (performance bond) at many futures brokerages is only $500 per contract, and you can open an account with as little as $1000. There's no Pattern Day Trader rule in futures; there's no limit on the number of times you can day trade, and no need to worry about delta, theta, bid/ask spread, liquidity, exercise, assignment, after-hours exposure, choice of strike, or choice of expiration. The ES has huge intraday trading volume and tight bid/ask spreads. The ES tracks the S&P500 index. One ES point is worth $50 per contract, so the leverage is essentially 50:1, comparing ES to the S&P500 index.
That, in a nutshell, is how I prefer to trade. But it's interesting to hear about other trading strategies.
If you get assigned, can you use margin to pay for the underlying stock? Then sell for profit and pay off margin? Then start again at step 1?
This seems like a strat for ppl with a larger account. That stinks. Good info though!
Thank you. I took accounting years ago. The thing that infuriates me with options is how do you know if you have made or lost money? That spreadsheet is exactly what I needed to try trading live options! Thank you so much! You got a new sub, too :)
If you can't figure out if you've made money or not, then you shouldn't be treading options, because it sounds like you have no idea what you are doing.
@@Wordsalad69420 Yeah, people gotta start somewhere. Shut your mouth if you have nothing but useless toxicity to spread lol.
What about wheel strategy but doing weekly options instead of 30-45 days?
You explained this pretty well. Lately, I’ve been less dependent on my 9,5 job to cater to my needs as my investments in the options market cover my lifestyle. It's been a source of passive income for me.
@@Halllaand I know that learning the ins and outs of trading is not for everyone. Personally, I trust Levi Clemans as he's the man behind my success. You can reach him through the
Levi
Clemans (a)
Gma
Lcom... You can reach him through that
As I go deeper into the market with Levi’s help, the more my portfolio focused more on income and the preservation of capital. That a higher allocation in less risky securities, that will give me returns. Thanks to him, these securities provide income that I have used to live on without having to touch my savings.
@@Christensen554 You did well. Seen remarks of his works. Haven't had any luck with investing too as this is my first shot and won't mind him helping me for a fee. I'm awaiting his response. Bless you.
Is he taking new traders? I'd be glad if he can help me
Given the covered call is above your cost basis, what DTE do you like to prefer, as early as possible as long as above the cost basis?
Rewatched this a couple times.
I am curious what you look for on the stock charts to determine if the wheel is a worthwhile strategy to run.
Your videos break down options trading very simply, I appreciate it!
One thing I found out is the formula used for the CC price on the spreadsheet meets to be adjusted by how many shares you’ve been assigned. I’ve been running the wheel for about 2 months now. Have avoided assignment until this week. Had 4 CSP’s ITM. After entering the debit it was saying I needed to sell covered calls for literally 4 times more than what I paid for them. You need to go in and adjust the formula for how many shares you’ve been assigned.
100% This is the exact issue I'm having right now. With 4 CSP's too lol. What exactly did you change in the formula? I'm not the most savvy with sheets/excel
Figured it out: Select N1, Change N3-O3 to O3-N3. Select N7, change 100 to the number of shares relevant to your position
Also one other thing I don't understand from this strat is why can't you just let the contract expire worthless every time it comes close to being out of the money and expiration date? is the only reason to roll to increase the amount of premium you get?
Great Video. When using the Wheel strategy is it better to use 1 stock with multiple contracts or several stocks selling 1 contract each?