Finding The Best Stocks For The Options Wheel Strategy

Finding The Best Stocks For The Options Wheel Strategy | Coffee With Markus | Episode 73

Intro: 0:00
Market Recap: 2:15
Viewer Questions: 8:30
Finding The Best Stocks For The Options Wheel Strategy: 11:30
Deep Dive Q&A: 30:15
Q: How do you draw the support line? 37:45
Q: If your account is double, why do we double position size instead of number of positions? 39:03
Q: So would you suggest staying away from entering a stock position using PXO strategy? 41:10
Q: For the wheel do you allow it to expire ITM or would you prefer to close the option at a slight loss prior to expiration? 44:02
Q: If your stock does not get assigned, do you let it expire? 45:32

Options Wheel Strategy

Finding The Best Stocks For "The Wheel" Strategy

One of the most important things to remember when looking for stocks to trade using the options wheel strategy is this: you MUST be okay owning the stock. This strategy although conservative can potentially risk assignment of options contracts.

If you’d like to learn more about this amazing strategy, feel free to check out our Options Wheel Playlist. (LINK HERE)

When selecting stocks that are right for the Options Wheel Strategy there are a few select criteria that need to be met


Find stocks with 30-50% volatility.
Trade stocks in the $30-$200 range.
Choose contracts with 7-21 DTE (Days To Expiration)

Avoid stocks that are approaching earnings reports. During earning season there can potentially be an increase in the volatility of the underlying stock. This type of risk is not suitable for the Wheel Strategy.

Select stocks that are trending upward generally, or have strong support.

Check the Wheel Calculator. This calculator can be used to determine position size based on your account value and cost of options premium.

As we review the positions taken, I’m going to discuss the previous criteria and how I’ve applied them to each trade.

The last thing that you have to do after finding the right options contracts is to execute the trade!

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[jakkfamily]

11:30 is where it starts and why you clicked on the video.

[KartuRaju]

Markus I am really glad to have found you. I was a novice in Options trading with huge pile of stocks invested. Seeing your videos learnt quite a bit and playing around. Man you are awesome in explaining in lame man's terms and simple language without much of Trader Lingo. Hats off to you pal. I am still yet to see the fruits of my learning soon enough hoping it works out. I have become a big fan of yours watching Day/Night all your videos.

[otlorilori]

Can I just say that although I’ve been trading this strategy for some time, I always learn something from you, Markus! You are greatly appreciated. 😊

[forsber]

Wow... I've watched a lot of videos in RE, stocks, crypto and You Markus, take the cake!! You have a new fan. Thank you!

[TMG_Dude]

I've never subscribed so fast thank you can't wait to catch a stream

[DineroyvidaenLA]

I really like your thought process, my only question why not use 45 to 60 days? There is more premium, and look to manage them at 21 days average. Thank you.. I have been reading that there is a lot of gamma risk within 21 days as an option seller..

[davidhaylett]

Hey Marcus, When will the wheel strategy book be available? Also, instead of buying stocks if the price falls to the strike price, can’t I have another option in place to discharge my obligation?
The problem with buying stocks is that I could be stuck with them for a long time before the price goes back up and this ties up a lot of capital.
Regards,
David.

[billestep]

The wheel is less risky than buying stocks funds or indexes. If you own the equity you only make bank when the equity increases and lose when it drops. On the wheel you can make money when it climbs, falls, goes sideways or in circles. I think it’s 80 percent options expire worthless. With an easy 35 to 45 percent ROI. Please someone tell me what other strategy I can trade where I only have a 20 percent chance of having to buy stock and something that’s going give me a 40 percent return year after year. Best thing I’ve heard is put money in a index fund and average 6 or 7 percent a year if I leave it in there for 10 years. Lol

[justchilling_.]

Do you get the full premium up front? Or do you get paid the full premium at expiration? When doing cash secured puts, and covered calls. Thanks

[samroberts]

Is it possible to make sustainable profits from Forex and how do you go about it?

[TomBrooklyn]

Would like to see a condensed version. Cheers

[dallasgray]

Great Video. I am curious on your barchart screener I see you have stock price, I am unable to select "stock price" as an option I am wondering how you did that?

[lawcch]

Markus, if there a possibility not to own the stocks using the Wheel strategy by selling NAKED OPTIONS? It is too expensive for me to buy 100 US shares due to currency exchange being too higher and expensive for me to buy the stocks. 1 USD = MYR 4.30. say stock priced US 100 for 1 contract cost me USD 10, 000 or MYR 43, 000. Can you recommend other selling option strategies besides credit spread or debit spread?

[tjmorrow]

Timing question Markus please. Once I have selected my Wheel Stock to sell puts and have set a support level is there a better time to sell the put such as just after the stock is bouncing up from support or does it even matter? I see premiums are high when I am just under current market price, It seems that if a stock like UBER which has repeating support and resistance might indicate to sell put just after bouncing up from support.

[VancesSpot]

The where can one find the wheel calculator you are using? I am a member (not paid) and I can't seem to find it on the Rockwell site.

[zalmal]

Can u look for the right stocks using the trading view scanner?

[DigiTechLabs]

I used to loathe Mondays trading hours of my life for dollars. Now I use my money to trade stocks (swing/options trading) & now I loathe weekends.

[glenindaybrown]

Great content and very well explained 😀

[onatski]

Hi Markus, is there a way I can just receive the newsletter every week? I already know how the wheel works. Please let me know how. Thanks.

[julianbusbeejr]

so, can i close it any time i want? (ex) in a week?