The Wheel Option Strategy Example

What Is The Wheel Option Strategy?

The Wheel is an options trading strategy where first we are selling puts to collect premium. In the instances where we get assigned the stock, we’re then selling calls to collect even more premium.

As you know, I’ve been actively trading “The Wheel” since the middle of the year (2020) and at the time of writing this, have yet to realize a loss.

In this article, (based on a video from August 21st, 2020), I want to talk about a specific “Wheel” trade on UBER where we ended up getting assigned shares.

Wheel Option Strategy Example: UBER

Within The Wheel, there are three trades that can take place.

The first is that we are selling puts.

The idea here is to collect premium and to get assigned stocks at a discount, to buy stocks at a lower price than they are trading right now.

Then once we have the shares, we are selling calls.

So let me walk you through step by step of exactly how it works.

Step 1: Selling Puts

So let’s talk about the first trade that we did here.

For the first trade, we were selling puts, and I want to take a look at the very specific example here.

I am going to the trade history, I am looking at the transactions for the last, let’s say, 30…