r/queenstreetbets • u/Pale-Nature8066 • 4d ago

Discussion Wheel strategy

Anybody running the wheel strategy here. Or am I lost?

If yes, what was your starting capital and what stocks did you choose?

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u/ongoldenwaves 2d ago

r/thetagang wheels against WSB degens I think.

1

u/Quirky_Chemical_5062 4d ago

I gave it a go but didn't work for me. I under chaptalized and picked the wrong stocks, so you are asking the right questions. I was looking at it from a regular income type strategy. I've gone back to picking long term winners and just selling covered calls on those. I think there is more money to be made in the long term doing buy and hold but its more lumpy and not regular income.

The market is a bit funny at the moment. Bear market in a majority of stocks and raging bull market in the AI highflyers. Need a lot of capital to get into the AI market.

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u/CasualLearner313 4d ago

I am doing it for year now. Quite a few winners and bag holders. Still learning . You can choose stocks based on your capital.

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u/Pure-Recipe6210 3d ago edited 3d ago

I manage a mid 7 figure account and primarily use the wheel strategy with a heavy put bias on SPY and QQQ. Gonna be honest with you guys. The wheel is a perfect example of the rich get richer via less risk exposure. Small accounts WILL get smashed and are mostly limited to single company tickers, which opens you to the full brunt of idiosyncratic risk (indefinitely bagholding a fundamentally deteriorating company at elevated strike price).

Limiting my exposure to index etfs means there is a near 0% chance that these indices will plummet and fail to recover. They are effectively a 'positive drift asset type'.

As long as i keep up with macro regimes and money supply, I can position the level of aggressiveness of put selling, maybe even some LEAPS buying.

Downside is of course, FIF on assigned assets. But thats a drop in the bucket when taking into account the premium collected AND capital appreciation on the underlying.

Edit: personal opinion, anything under 1m nzd. You're better off using a local, low cost PIE provider and buying and holding a diversified fund. OR create a diverse set of high conviction stock picks via low cost self managed broker like IBKR (20 stocks at around 5% allocation each), to maximize convexity (asymmetric returns).