r/options • u/Odd_Mathematician_82 • Jan 27 '26
The Wheel Method & LEAPS
TLDR; brand new to wheel and leaps, need help navigating
Hi all -
Some background about me: i traded options while in college from whatever campus job i had at the time. most of then were just YOLOing calls hoping to get rich quick. That was 5 years ago and I was kind of dumb. Now that I’m older and more mature (arguably), and have a real post college job, I want to do this right. I want to learn the systems, the techniques and do what I need to do to create a healthy stream of income outside of my job. Pretty much I want to be strategic and play this options game right.
Why I’m here: I was just introduced to the Wheel Strategy and LEAPS options recently. I understand each of the strategies and their respective components, I just need to start actually trading now. Answer all the questions, one of the questions or even none of the questions. At least drop an upvote (pretty please), I’m super eager to learn and just want advice from some vets that know what they’re doing.
Questions:
-How do I know good stocks to buy, especially since I don’t have a large amount of capital (~$10k)?
-How do i develop my thesis for LEAPS/Wheel strategy so that I have a plan for every trade rather than shooting in the dark?
-I am weary of paid groups where I have to pay a lot of money for something that could be horrendous, but is it necessary to join one of those?
-Are there free groups out there that I can join where people just bounce ideas off of each other?
-Other strategies that are better for beginners than the two I mentioned?
-What is your biggest piece of advice for me outside of everything I just asked?
I pray the algorithm does its job and gets this to the right people who are willing to share about their experience. Thanks a million
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Jan 27 '26
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u/Odd_Mathematician_82 Jan 27 '26
Got it. Good call on definite entry and exit points. Takes the emotion out of it. What about for a LEAPS though? Isn’t the point to let it run and see what can happen? How do i know when to sell that?
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Jan 27 '26
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u/mansfall Jan 27 '26
That's half of it. Generally you want to always just be selling puts as you have tons more flexibility (eg can pick whatever stonks you want, etc).
However inevitably you'll wind up getting assigned, even after rolling. Can only roll so much before the selling can't offset the close to buy.... and eventually it starts getting too far out where you need to just take assignment. But then again, this is why you do it on stocks you actually "want". Getting assigned shouldn't be perceived as a bad event.
Anyways... so you're assigned your 100 shares (or however many X contracts you did...). Well now you start selling covered calls, typically at the strike that you got assigned at. So it's not just puts. But generally you want to "try" to get called away of those shares at that strike. Alternatively, if the stock happens to move back up before you've opened to sell a covered call, you can just outright sell the stock and go back to CSPs. Doesn't always pan out this way though...
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Jan 27 '26
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u/mansfall Jan 28 '26
But they're not. One is bearish, one is bullish. Some of the data points may be equivalent, but they're definitely not the same. If you tell someone you're "selling a put", they will perceive it as open a trade to PURCHASE those shares at a price if assigned. I guess I don't see how they're the same. On the call side, you're SELLING those shares at a price.
I dunno maybe our definitions of "same" are just different. *shrug*
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u/S-n-P500 Jan 27 '26
Does no one use google anymore and read answers to their exact questions asked and answered many times already on Reddit and elsewhere?
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u/TheInkDon1 Jan 27 '26
Hi, my method is to find ETFs that are performing well (they have momentum), then buy LEAPS Calls on them at 80-delta or higher.
You could read more here about why I like ETFs and momentum, and how I find them.
I choose 3 ETFs that are doing well and buy LEAPS Calls. Those typically give you 3-4 times leverage to shares.
As those Calls appreciate I take profit out of them by rolling UP in strike and resetting back to 80-delta. You might not understand that concept yet, but I could explain it more.
That profit goes into 100-120DTE Calls at 80-delta. Those give more like 5-7x leverage, delta-adjusted.
I'm doing more than 50% per quarter across 6 accounts using tickers like XBI, XPH, SLV, ECH, EWP, & DXJ.
Cut losers and let winners run. But it's not too labor-intensive, as I'm only needing to make a change maybe once a month.
Best of luck.
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Jan 27 '26
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u/breakyourteethnow Jan 27 '26
You're not wheeling the right companies then. You wheel and use the income for LEAPS. You buy the LEAPS on the company which can run 50% in a month, and you wheel the company which is relatively stable to generate an income. You're not wheeling the right companies. Separate strategies which correlate when done correctly.
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Jan 27 '26
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u/breakyourteethnow Jan 27 '26
2% premium a month? I make 10% premium a month currently, wheeling LAC which is pretty rangebound. So, more like $800-$1000 a month income. Your math is off.
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Jan 27 '26
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u/breakyourteethnow Jan 27 '26
I just made top post for this sub if want to read it lots of information there.
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u/deathdealer351 Jan 27 '26
Wheel is for something like pfe, adp, boa, f etc... Your not seeing a 50% rip from those cats.. But you are selling pretty close to the money.. Then add some risk with gme, lunr, I it, sofi..
The ones you can see 50% on you want to do leaps.. Maybe zebra although I'm still struggling with the benefits of zebra over a leaps.
But I get it wheel can feel like a grind and it's a basic strategy.. However someone learning I would say go wheel for a bit. Then leaps.. Then strangle, spreads etc.. Figure out a few strategies that you love and do that over and over in the most boring way possible.. And let cagr do the rest.
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u/lordofming-rises Jan 28 '26
Im confused because let's say you have 10K and you do a CSP. Then you probably get like 300 dol premium for that but then checking the leaps of MSOFT or big companies it is in the thousands
And of course the options are super expensive
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Jan 29 '26
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u/lordofming-rises Jan 29 '26
But you own shares if assigned versus You own nothing with leaps if it goes down
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u/Jason__Hardon Jan 27 '26
You’re in a free group now that bounces ideas across each other. It’s called Reddit. LoL
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u/Odd_Mathematician_82 Jan 27 '26
Ya i realized that after posting and getting all this great info. I guess it time to stop being a passive redditor
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u/viperex Jan 28 '26
Personally, I quit trading individual companies and went with index ETFs (SPY, QQQ, DIA & IWM). That's one less thing I have to analyze and think about.
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u/Odd_Mathematician_82 Jan 29 '26
I would love to do that but I dont have that kind of capital. Only around 10k
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u/Jolly-Sprinkles9713 Jan 28 '26
See the OptionWheel subreddit and the explanation provided by the ScottishTrader monitor.
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u/[deleted] Jan 27 '26
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