Wheel Strategy Tips - How to 'Fly Rescue Missions'

Wheel Strategy Tips - How to "Fly Rescue Missions"

You might have heard me talking about "rescue missions" when a Wheel Strategy Trade is in trouble.

In this video, I will show you exactly what that means and also talk about more wheel strategy tips, e.g. trading the wheel option strategy, trading the wheel in a down market, and several the wheel option strategy example.

Wheel Strategy Overview: 1:20
What Are Rescue Missions?: 3:32
How Do You Fly A Rescue Mission?: 7:39
When Should You Fly A Rescue Mission?: 10:17
Important Rules: 22:06

The Wheel Strategy Overview:
1) Sell Put options and collect premium
2) You may or may not get assigned
3) when you are assigned, you sell calls and collect more premium.

- Problem
* What if you can't get enough premium for the calls? (at least 30% annualized)
* Don't sell below the assigned strike price.

Rescue Missions:
- You sell more put options below the assigned strike price
- Advantage:
* You collect more premium
* If you are getting assigned,
* you lower your cost basis
- Easier to get out of the trade

RIDE example:
- Got assigned at 21.50, currently trading at 16.23 (100 shares)
- The idea is to sell strike price at 11.50 put, collect more premium.
- If assigned, we would own 100 more shares at 11.50.
- This would bring the average per share down from the initial 21.50/share to 16.50/share, lowering our dollar cost basis making it easier to get out of the trade.

How Do You Fly A Rescue Mission?
- Sell Put below the assigned strike
- Same amount or more
- Follow the Wheel Calculator
* I want to make at least 30% annualized

When Should You Fly A Rescue Mission?
- Only if you can’t get enough premium for the calls
- WAIT!!!
* Don’t fly rescue missions too early!
* You need to keep your powder dry (MARGIN)
- Only consider this if the stocks went down at least 30% from your assigned price

Examples:
AAPL: down 12% -- NO rescue mission
GDXJ: down 9% -- NO rescue mission
RIDE: down 24% -- NO rescue mission yet
* We can start thinking about it

IMPORTANT:
You can’t rescue every trade!

5 Stocks NOT to sell puts on when trading The Wheel:
- “Reddit Stocks”: GME, AMC, BB, BBBY, SLV
- Stocks with earnings before expiration
- Stocks with Phase 3 clinical trial (SRPT)
- Crazy stocks
- Stocks with premiums that are too good to be true
* Stocks above
* Leveraged ETFs (2x, 3x, …)

Summary
- Yes, you can fly rescue missions
- Don’t trade “stupid stocks” (see above)
- Have a plan BEFORE you sell puts
* Where’s the next support level
* Rescue Mission
- Don’t panic
- Don’t start flying rescue missions too early

Recommended Links & Videos:

#StockMarket #OptionsTrading
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[himanshuvaishnav]

You are all alone in your league; most industry "experts" are not willing to go this far, this deep. Thanks a milion.

[rockwelltradingservices]

If you need more wheel strategy tips or other info about trading the wheel option strategy, leave a comment below.




Recommended Links & Videos:

[ts]

Future power x customer here once I obtain the funds. I truly appreciate the lengths you go to clearly teach and explain the concepts. I will master this strategy with your guidance. Thank you 🙏

[clintanderson]

You got my like for being honest with the "only puts at support at xxx". Liked for now. Just waiting on your other videos to subscribe, but you've got my attention Mark.

[youngzen_xyz]

a very helpful explanation strategy. I like all your videos hopefully you're in a good health🤗

[saimiride]

Hello!
I'm starting to use the wheel strategy, and I'm learning a lot from you and your channel. Thank you so much for that. Your explanations are very clear, and it's a pleasure to follow you.
I apologize for this question, and I hope you can forgive me, but in order to feel completely comfortable with your strategy, I need to understand why someone from the "Real pnl" channel claims to have your real data and says that you've been losing money since 2019 despite your strategies. I'm sorry if this question makes you uncomfortable, but I think it's an opportunity to address this issue.
Thank you for your work, and have a great day!

[cirqduchalet]

So, now that RIDE suffered an 18% decline the following day after this presentation, putting the stock well past 30% bellow assignment price, do you wait to see a bottom to sell additional puts to lower the cost basis? I have been learning from you! Thank you for sharing.

[nghebao]

This is awesome: DCA to lower the avg cost. Thanks a lot

[francescocostantino]

@markus, several traders selling put options use to roll and only if it is not possible or convenient (small premium and long DTE) take assignement and sell calls. Why do you prefer non to roll?

[VB-hokv]

Mr. Markus Love from INDIA can you please tell me which presenter software you are using in your videos.

[tonymontana-il]

Started using the wheel strategy last month, have made $1600 in premiums! Stocks i used it on, MARA, SPCE, TLRY, CCIV !

[computerworx]

@markus if my sell put is far out like 2 months and its on the 30% below strike price, Should I do the rescue mission or should I wait before doing the rescue mission? Just trying to clarify about the timeline portion. Thanks again for a wonderful presentation.

[deterjg]

Love it!! I'm currently rescuing my workhorse assignments after selling 3 put at 32 about 3 weeks ago. My average cost is now around 20. Still averaging down by selling ITM puts for higher premiums. Any thoughts about ITM puts when rescuing?

[sonny]

So is TQQQ a stock I shouldn’t trade ?

[shaunrhine]

What chart are you using to determine support? Daily, hourly? Monthly?

[brandysoda]

Great re cap.On the examples from traders, will be GREAT if u include WHEN they sold the puts.It doesn't make sense to critcize the trade if u don't know when it was sold.

[petkuscinta]

Even great high-quality stocks can go down for a long time (even if you sell at equal or lower than 100w EMA). For example, if you would sell puts in May 2008 you would have to wait almost an entire year for the stocks to recover to -30% and 4.5 years till they come back to the same level. When they crash down they all crash together not just one as they do tend to follow the SP500 curve.

[pickup]

You are so close to having engineered a professional quant trader strategy called “mean reversion” it’s almost scary. Do you know anything of multivariate ordinary least squares regression? Using that and the resulting standard deviations will give you much more pin-point accuracy in strike price selection.

[FidelSantana]

How is the option's annualized return calculated? I think it should be different depending on what you are doing, a Sell or a Call. Do you recommend any tools? Thanks!!

[JigDPT]

How do you figure out if the premium you collect is at least 30% annualized?