The Options Wheel on Core Holdings

The Wheel is a loop, not a single trade. You sell cash-secured puts on a core holding you'd happily own; if assigned, you sell covered calls against the shares; if they're called away, you start again.

A repeatable income loop on a high-conviction stock you're happy to own for the long run.

How the loop runs

1. Sell a cash-secured put at a strike you'd buy at. Collect the premium.
2. If it expires worthless, repeat. If assigned, you own the shares at an effective price of strike minus premium.
3. Sell a covered call against the shares. Collect that premium too.
4. If the call expires worthless, sell another. If the shares are called away, return to step one.

Pillar 1 · Illustrative setup

How this example is built

Illustrative inputs only — not live prices.

Open the on-device calculator →

The Wheel is a loop, not one payoff — model the put leg and the call leg separately in the on-device calculator.

Pillar 2 · When & why

Why this fits Long-Term Core Holdings

Run on long-term core holdings you genuinely want to own, because every step assumes you may end up holding the stock. Over multiple cycles the stacked premiums lower your effective cost basis — the number worth tracking across assignments.

You carry full ownership risk whenever you hold the shares; a serious decline is the Wheel's real danger, and no amount of premium fully offsets it. Assignments also create tax lots worth tracking. Only run it on stock you'd hold through a drawdown.

Pillar 3 · Risk / reward

The defined-risk math