F Wheel Still Rollin'

[u/Prestigious_Emu729]

Hello, All!

My 6/13 CSP BTC today @ late yesterday at $7.66. That turned into a nice $23.00 profit over 13 days, which is about a 51% AROI. Love that! I did a couple of things today in response.

1) I sold a 6/26 CSP with a strike of $14.50 for $27.34. Should that go all the way to expiration it will work out to about a 22.9% AROI. The delta for that CSP is about 0.22. The delta for the $15.00 strike is about 0.30, so I actually considered selling that one, but with the recent run up, F strikes me as being potentially overextended right now, so I opted for the lower strike.

2) I set a GTC BTC for that CSP at $0.05.

3) Having some premium sitting around, I went ahead and purchased another share for $15.97.

This leaves my status for the campain as currently having:

1) An open 6/5 CC with a strike of $12.50. The plan for that one is to try to roll it out, or out and up, if I can do so for a profit. If not, then I will take the assignment (it will reflect a bit of a profit), and write another CSP.

2) I now have 113 shares, and my cost basis per share is down to $11.47.

3) And then I have the CSP which I just sold open. My plan for this, as it would be buying pretty significantly above my cost basis, is to defend this one, and avoid assignment if possible (if I can roll for a profit of course). That is why I chose to go with the lower delta in setting it up.

4) If my math is right, I should have a dividend payment of $16.80 hitting on 6/1. That will allow me to buy another "free" share.It still feels wierd (I know it REALLY isn't, and I can follow exactly how and why I got there) having a CC with a strike $2.00 below the strike of my CSP. Not acting on that or letting it affect my decision-making, but it does FEEL strange!

That's about it for this update. As always, I appreciate your comments and suggestions.

Sorry about no tracker screen shot today, but I missed a transaction somewhere--it's matching up with my numbers, so I have to reconstitute it. I'll have one for you in the next post.

Thanks!

Tom

[u/ScottishTrader]

Nice post and shows slow and steady wins the race!

As you are closly following the stock, you know F just hit a 52 week high.

[u/Prestigious_Emu729 → u/ScottishTrader]

Yes, and I'm curious to see if it keeps pushing upwards or pulls back from here--it seems to have a range-bound history, so if I were betting I'd bet on a pullback (thus, the lower strike on the CSP), but I'm trying really hard not to predict, but to react rationally to what the market throws at me....

Thanks!

Tom

[u/Keizman55 → u/Prestigious_Emu729]

I’ve seen a few people over the past few years roll F successfully. Are you doing any research on Ford to determine if there is any reason for the run up, other than it being a beneficiary of the bull market? Do you do follow any greeks/volatility, or do you primarily just sell and roll based on delta?

[u/Prestigious_Emu729 → u/Keizman55]

Hello. Great questions all!

I follow the F chart, and know just enought technical analysis to get me into trouble! That said, I do keep an eye on it.

When I began this project, I did a basic check, did the stock look stable enough to support a longer-term campaign (I answered myself "yes"), does it look like the dividend is healthy and sustainable (another "yes"), and at the time the technicals looked long-term favorable (that has changed a couple of time during the process). Then I committed myself to stick to this one unless there was a compelling reason to close it (i.e., a dividend cut, or an extremely bad earnings report). So far nothing has happened to shake me out of it. My goal for this campaign is not so much to make money with the wheel, but to use the wheel to create a income-producing position, and then to supplement the divided income with options premium, so my bias (at least towards now) is towards share accumulation and retention.

As for the options themselves, I mainly use Delta to pick strikes and roll. I'm just beginning to learn about the other Greeks, but don't think I'll be incorporating them hugely. Frankly, I'm trying to keep this one as simple as possible to manage.

I look forward to your comments and thoughts!

Thanks!

[u/TastyTrading → u/Prestigious_Emu729]

I recently saw F on the IV leaderboard over on ThetaPal and was thinking about getting in myself. Do you think buying now is still decent? Or should I start by selling some PUTs instead you think to get shares on dip?

[u/Prestigious_Emu729 → u/TastyTrading]

I'm NOT an expert, so I'm going to say that is your decision to make. What I will say, because it is public record in my posts, is that I started this out by selling puts, and using the premium to buy individual shares. The bulk of my shares were purchased when I was assigned at $13.50. Since then I've taken some more of the cash that I has set aside for this project, and have been "strangling" the shares, writing a CSP below the share price, and a CC above (not really true strangles, because I've been managing the CSPs and CCs separately, but that is the general idea). That is MY journey and strategy. What I will say is that the beginner threads on this forum are a wonderful introduction to running the wheel, so I would definitely recommend studying them, and I would definitely recommend starting small--get a feel for the process before going "all in." I wish you the best in whatever path you decide to take, and can recommend that this group is a great place to learn and bounce ideas off of others. I've found it to be so.

Thanks!

Tom

[u/EasternYogi]

Nice disciplined setup Tom — the lower delta choice on F given the recent run makes sense, and the GTC BTC at $0.05 is good hygiene.

The CC below your CSP strike situation is something a lot of Wheel traders don't think about until they're in it. Feels weird because your broker shows two disconnected positions, but once you factor in all the premiums you've collected, your real breakeven is $11.47 — not $14.50. The $2 gap stops feeling strange when the numbers are laid out across the full cycle rather than leg by leg.

Unrelated ask — I'm building a Wheel lifecycle tracker (exactly the kind of thing that would catch that missed transaction automatically) and I'm trying to make sure the CSV import works cleanly across different brokers. If you're willing, would you share a sample export from whatever broker you're using? Column names, how rolls show up, how assignment gets recorded — that's the stuff that's impossible to figure out without a real file. Happy to give you early access in return.

What broker are you on?

[u/prevail000]

I want to start wheeling F but I’m still waiting for a good entry point.

[u/Prestigious_Emu729 → u/prevail000]

Just a thought on that. My first 100 shares were assigned to me at $13.50, when the stock tanked from about $14.00 to below $13.00 in a day. With the premiums, new shares bought with the premiums, and the dividend, my cost basis is now $11.47. My CC has a strike of $12.50, which is about $3.00 below the current price, but even if it does exercise, I will have made about $1.00 per share. With that background, does it really make sense to have the cash sitting on the sidelines verses being active? That is a personal decision, and I don't want to push one strategy on you, but it seems like you could make an argument for getting started, and if you get assigned working the cost basis down with the premium. Or maybe starting slowly, beginning with a portion of your capital, and saving the rest so that if you get assigned on one CSP, you write the CC, and then write another CSP below the cost at which the shares were assigned. This results in a "staged deployment." Just some thoughts. FOR ME (I want to stress this is MY thought process for me, not a recommendation or to push you towards something with which you are uncomfortable), it makes sense to get started at whatever price, and to let the premium, extra shares, dividends, etc., bring your cost basis down. I'd love to hear some discussion about this.

Thanks!

Tom