Learn How To Do Wheel Strategy
Learn How To Do Wheel Strategy
The Wheel Strategy is a popular options income strategy that combines selling puts and covered calls in a repeatable cycle.
How It Works
- Sell a cash-secured put on a stock you’re willing to own.
- If the stock is not assigned (stays above strike), keep the premium and sell another put.
- If the stock is assigned (drops below strike), you buy the stock at the strike price.
- Once you own the stock, sell a covered call on it to generate income.
- If the call is not exercised, repeat selling calls.
- If the call is exercised, the stock is sold, and you restart the cycle by selling puts again.
- This strategy works well for investors seeking consistent income with a plan for owning quality stocks.
