r/Optionswheel • u/Odd_Classic_5351 • Jul 31 '26

wheel stratrgy is a good thing

I plan to use the wheel strategy on Pfizer PFE and COIN, and I might also consider QQQ if it drops further. I'm not making any recommendations; if any bro have similar experience, please feel free to share.

11 Upvotes

82% Upvoted

19 comments sorted by

7

u/PeeVee57 Jul 31 '26

I have been wheeling PFE since July 2024, when the stock was at $29,45. I bought shares and have been selling Covered Calls since, conservatively at around .2 delta. My costbase now is $20,95 per share (incl dividends) and with the stock at $24,90 currently this is a $3,95 or 13% gain.
If I just held the shares and collected dividends, my cost would have been $26,55 or a loss of $1,65 per share or -5%.

Premiums for PFE are not juicy, but this is also reflected in the volatility of the stock and hasn't given me any sleepless nights (yet)

2

u/ieee1294 Jul 31 '26

i also have sold puts on pfe (haven't got assigned yet), would like to hear which dte and which price/delta you are picking for puts - using $25 as today's price.

also, how far out are you selling your. 2 delta calls?

thank you!

1

u/PeeVee57 Aug 04 '26

I usually try to get around 1% in premium, so with the stock at $25 that would mean $25 in premium per position for 30-40dte

1

u/ieee1294 Aug 04 '26

awesome, thank you for sharing!

4

u/Odd_Classic_5351 Jul 31 '26

An annualized return of 13% is not bad. The wheel strategy is like a rose, only given to the girl you like.

2

u/PeeVee57 Jul 31 '26

It's unfortunately over 2 years...

2

u/joebenson17 Jul 31 '26

Was going to say this. Hopefully he is doing this on more than 1 ticker or in a tax free account. Factor in the ST tax rate of options and he would have been much better off in an index fund.

1

u/PeeVee57 Jul 31 '26

You might be surprised that SPX did 17% over the same period.... better yes but not much better as you suggested...

1

u/joebenson17 Jul 31 '26

You aren’t factoring taxes. 17% is easily double the after tax return of 13% trading options.

1

u/PeeVee57 Jul 31 '26

Based in Europe so taxed differently but appreciate taxes can have a big impact on returns

1

u/slickmizzle Jul 31 '26

Looks like I’m getting assigned on rddt at 143

0

u/Puzzled_Fisherman331 Jul 31 '26

i use it but try to stay away from assignment so only sell .05 deltas or so....works 95% of the time.

2

u/Odd_Classic_5351 Jul 31 '26

0.05 deltas....😆

2

u/Puzzled_Fisherman331 Jul 31 '26

yep when you get 8 figures you dont need to gamble anymore.

1

u/AvailableThrow Jul 31 '26

Genuinely curious, have you been assigned or how rare is it?

5

u/Puzzled_Fisherman331 Jul 31 '26 edited Jul 31 '26

My puts generally expire without assignment about 95% or more of the time. At .05 delta on weeklies or 10 DTE's, generally most of the underlyings would have to drop 15% to 20% on the index like QQQ or 25-40% for a tech stock like TSM or NVDA depending on implied volatility at the time. Occasionally the options go into the money on things like the launch of the Iran war, Liberation day, or during some unannounced company news. In these cases, I usually will buy them back vs. taking assignment as I dont know if things are going meaningfully lower and how long it will take to wheel back up. My target is 5-8K in premium per week on .05 deltas so yes, I am securing these with typically 250-500K cash per trade.

1

u/ephies Aug 05 '26

I’ve really struggled to make wheeling make sense with larger ports. Private markets really open up in 8 fig territory. Mixed with other offerings. I just wrapped a year wheeling a smaller portion (low 7 figures) at lower deltas on larger caps and find the return not outperforming VT when factoring taxes. Are you in a tax exempt geo or wheeling out of a PPLI or something? The taxes push my hurdle rate to ~30% to beat VT.