What Is the Wheel Strategy?
The Wheel is a popular options income strategy built from two simple trades you may already know: cash-secured puts and covered calls. The goal is to collect premium over and over on a stock you'd be happy to own.
Here's the cycle:
- Sell a cash-secured put on a stock you want to own, collecting premium. If the stock stays above your strike, the put expires worthless and you keep the premium — then you do it again.
- Get assigned if the stock drops below your strike. Now you own 100 shares — at a discount, thanks to the premium you collected.
- Sell covered calls against those shares, collecting more premium. If the shares get called away, you've sold at a profit and you start the cycle over.
It's called the "Wheel" because you keep rolling through these steps. We send real-trade alerts for every stage of the Wheel, and the course teaches the strike and timing decisions behind it. You can see how it's performed on our results pages.
As with any strategy, the Wheel carries risk — if a stock falls sharply after assignment, you can be left with an unrealized loss on your shares.