Wheel Strategy For Options Explained In 15 Minutes
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- เผยแพร่เมื่อ 11 ก.ค. 2024
- The Wheel Strategy for Options Explained in 15 Minutes!
First time here? Watch this video: • First Time Here? - Wat...
Watch this video and discover:
- What Is The Wheel Options Trading Strategy?
- How Do You Choose The Right Stock?
- How Do You Choose The Right Option?
- When Do You Take Profits?
- What To Do When The Stock Moves Lower?
Recommended Links & Videos:
The "Wheel" Strategy Explained: bit.ly/3ePN4qT
How To Fly Rescue Missions: • Wheel Strategy Tips - ...
Wheel Book: www.rockwelltrading.com/the-w...
Trading with Margin: • Trading With Margin - ...
My Trading Routine: go.rockwelltrading.com/my-tra...
To get the transcript and MP3, go to: www.rockwelltrading.com/coffe...
#StockMarket #TradingOptions #OptionsTrading
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Did you enjoy this quick explainer? Learn EVEN MORE here: th-cam.com/video/Nsp3LiFKeuA/w-d-xo.html
Great summary. The only thing you missed I think is the 30% annualized profit and how to calculate it. This was for me the eye opener why I started to trade the wheel and what makes the strategy so interesting.
Thank you for including a mention of that! Are you currently using our Power X Optimizer to filter through stocks? It also provides strike prices based on your individual profit target. If you aren't using it, let me know why :) www.rockwelltrading.com/products/10-44-powerx-optimizer-mar22/?TH-cam&PXO-&Markus&
All I would add is in Step 2 "Picking the right stock" to also avoid earnings or big news.
If you notice that premiums are especially good one week ... definitely check the events calendar! However, if a stock has a dip before earnings, the premiums are big and I like the stock, sometimes I'll take that gamble, a bit risky but better than buying outright.
This video might be helpful :) th-cam.com/video/HNYavABueuo/w-d-xo.html
Our Power X Optimizer also recommends stocks based on a filter which you can customize: www.rockwelltrading.com/products/10-44-powerx-optimizer-mar22/?TH-cam&PXO-&Markus&
I started using the wheel strategy last year, and I had success with it for a while. But it really screwed me up when volatility started creeping in last December. Psychologically I felt like I was kind of hedged and protected since I was writing calls on these positions so when things started going south I was blindsided. And the call premiums didn't make up for the drops. Normally I might have stop losses set or at least in my head. But I didn't do that with the stocks I had wheeled. I will start to try this strategy again but I don't have faith things have normalized yet. With the big rally the past two weeks, valuations are again questionable. If we get some dips here I will try to make a little back by writing otm puts with the goal of avoiding assignment. Maybe stick to QQQJ and XLF for now.
May you go in a bit more detail how and why the losses occured?
@@farmdve Well you literally are not allowed to put in a stop-loss order on a stock you sold calls on, you need to buy back the call before you could sell or put a stop loss in. And for example I was wheeling BAC and SOFI. The latter was definitely a riskier stock, I know. But it had strong support at $14 and good news. I did well on it up until around the end of last year but I was not expecting it to drop to $8. And I didn't think as clearly about exiting the position because as I said I felt like I was in a way hedged by writing calls. But the stock dropped significantly. And then what do you do? You can write calls still but the call premiums aren't great in a bear market. And then is the $15-20 per contract worth it if the stock has a dead cat bounce and you lose your shares and you're still $5 underwater? BAC ... a more stable stock but it dropped from $50 to $38 in four weeks. Not as big of a decline as SOFI but still significant and created similar problems. It's been a very brutal three months in the market though.
Hello @r t, how are you currently choosing the stocks you wheel? Have you checked out our Power X Optimizer yet? www.rockwelltrading.com/products/10-44-powerx-optimizer-mar22/?TH-cam&PXO-&Markus&
Thanks a lot for your explanations Markus.
Awesome! Thank you for watching! :) By the way, do you know about the PowerX Optimizer?
Always a pleasure and a privilege Markus. Thank you
Awesome! Thank you for watching! :)
Cool content!
I like how you break it down in writing.
Thank you for sharing your knowledge and experience!
You are welcome. ;)
the only channel where you create easy to understand graphs and examples.
Thank you @farmdve! Have you checked our Power X Optimizer yet? www.rockwelltrading.com/products/10-44-powerx-optimizer-mar22/?TH-cam&PXO-&Markus&
I like to distinguish my average Entry price based on strikes and my average Break Even price. Best case scenario is to sell call and exit at or above Entry average. But if I want to exit a “bad” trade the I try to exit at or above my Break Even average.
Thanks for the video!
Great play as well! Have you had a chance to check out our Power X Optimizer yet? It recommends strike prices for you, making a trader's life A LOT easier. www.rockwelltrading.com/products/10-44-powerx-optimizer-mar22/?TH-cam&PXO-&Markus&
Hello Markus, Your videos and examples are so helpful and really exciting to watch.. Why did you stop making video? I have not seen any new content..
I’m doing a live show every day! Just click on LIVE videos and you’ll see them. 👍
TY
Perfect tanks!!
You are welcome. I am glad that this helps.
Hi Markus, After you get assigned do you sell calls at the assigned strike? Or higher?
Great question! Our software actually recommends strike prices for you! www.rockwelltrading.com/products/10-44-powerx-optimizer-mar22/?TH-cam&PXO-&Markus&
I’m going to try this. It is a good strategy for people that have a full time job ?
It depends where you work and what you have to do :) We have many members that work full time AND do The Wheel Strategy. If you have our Power X Optimizer, it takes a lot of the guesswork and research out of trading, allowing you to trade with only 15-30 minutes of work a day. Check out our software here: www.rockwelltrading.com/products/10-44-powerx-optimizer-mar22/?TH-cam&PXO-&Markus&
You can also message me back on this if you have any questions.
Something I was thinking but never heard anyone talk about. Maybe it's because it's a bad idea. If your cost basis is significantly higher than the current stock price and you fly a rescue mission and get assigned new shares closer to the current stock price. Can you sell covered calls with just the new shares based off the strike price of those new shares assigned to you? For example: Your cost basis is $14 on all your current shares and you were assigned another 1,000 shares at 9.50 and the stock price is currently at 9.30. There's really no premium at $14. Is it a smart idea to sell a covered call on those new shares at 9.50 or $10?
@Markus Heitkoetter
Great question! If you have our software (Power X Optimizer) already, it should let you know if/when you're able to sell covered calls. www.rockwelltrading.com/products/10-44-powerx-optimizer-mar22/?TH-cam&PXO-&Markus&
If you don't have our software, I usually wait until the market price comes back a bit before being able to sell calls. I still want to make my set annualized return which means if I can't sell covered calls at a price that allows me my desired returns, I'll wait a while longer until I can.
Did that answer your question?
I am stuck with several growth stocks that got assigned. Should I still fly rescue missions?
One advantage being poor is you only need 1 contract and your rescue mission is 1/2!
I like everything here that you’re talking about except for this: why are you selling options with the highest implied volatility, the fattest premiums that yield the most ROI. I’d rather collect $.50 premium against the two dollar strike price, 25% return why not do that ?