Find good stocks that you wouldn’t mind owning them for a while and make sure to choose ones that are unlikely to go bankrupt or reverse split in near future. Trading the Wheel strategy is relatively simple. 2) It doesn’t require my attention all the time Place the trade and I can walk away for a while. The wheel strategy allows me to do just that. In fact, I am looking for ways to NOT have a job. They look for ways to trade as much as they can and most of them ended up day trading. 5 Reasons Why I Love the Wheel Strategy 1) It doesn’t require me to sit in front of the computer all day longįor some people, trading is just another job. If someone wants to own a stock for the long term, the Wheel Strategy can be used as well, by purposely selling in the deep money Put to get assigned for the stock at a discount, then keep selling Covered Call and avoid assignment by rolling the Call out if likely to get assigned. Please note this is the way I prefer to trade the Wheel Strategy. Do not hold it so the capital can be deployed for the next Put selling cycle. It was a lot of trials and errors before I ended up realizing the Wheel strategy is the most profitable way to trade, at least for me.ģ) If the stock price drops and gets assigned, sell Covered Call until the stock price recovers to the entry point.Ĥ) Sell the stock as soon as you can. Some are premium selling and some are premium buying.Īs you can see it was not a straight path for me to get to the Wheel strategy. Some have a higher probability of success than others. Over the years, I have tried many different types of options trading. I started out trading penny stocks and eventually made my way to Indexes and ended up trading options. Don’t get me wrong, they do work for many people but they are just not a good match for my personality. I have personally tried a few of these and they have never worked out for me. They all require active monitoring of stock price, stock movement, stock news, etc etc etc. To me, all of these types of trading sound hectic.
Day trading, Swing trading, Momentum trading, Scalping, etc. When it comes to trading styles and strategies, they can be grouped in so many different ways.
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