01
Capital allocation
I establish how much capital is available for trading, how much should remain in reserve and how much exposure to take on any individual company.
Explore capital allocation →My philosophy
It's not just about selling options. It's about having a process.
The OptionsWheeler Method is my practical framework for approaching the Wheel consistently. It focuses on the decisions made before opening a trade and the management decisions that follow.
My aim is to make informed decisions, understand the risks involved and avoid treating premium collection as an end in itself. Not every stock is suitable, not every premium is worth collecting and not every position needs to be opened.
01 / SELECTIVITY
Choose carefully
I research the underlying company before considering the options available on its shares.
02 / DISCIPLINE
Allocate thoughtfully
I decide how much capital to deploy, how much to reserve and how much exposure to accept on any individual company.
03 / MANAGEMENT
Stay involved
I monitor positions, understand the choices available and know when to accept an outcome.
The process
The seven stages of the OptionsWheeler Method
My structured approach takes me from selecting a stock through to managing the complete Wheel cycle.
02
Stock research
I look beyond the option premium. I assess the company's financial position, cash flow, valuation, share-price behaviour and option-market liquidity.
Explore stock research →03
Selling cash-secured puts
I consider suitable strikes, expiry dates, premiums, implied volatility and the effective purchase price I'd be comfortable accepting.
Explore cash-secured puts →04
Managing open positions
I monitor the position as the market moves. I consider taking profits, closing, holding or rolling based on the remaining risk and available alternatives.
Explore rolling options →05
Assignment and share ownership
I understand what happens when a put is assigned. I'm prepared to own the shares and reassess the investment rather than treating assignment as automatically positive or negative.
Read about assignment →06
Selling covered calls
If I'm assigned shares, covered calls may be used to collect further premium. I consider strike selection, cost basis and the possibility of shares being called away.
Explore covered calls →07
Risk management and review
I review total exposure, concentration, earnings dates and changing company fundamentals. I'm willing to pause rather than force another trade.
Review risk management →
Important: These stages describe a framework,
not a rigid sequence or a requirement to complete every stage
in every market situation. I can close a position,
accept assignment, hold shares or step away from a trade.
An example framework
Capital management matters as much as trade selection.
One principle of my approach is not to commit all available capital to open positions. Keeping cash in reserve can provide flexibility if several positions are assigned or market conditions change.
For illustration, a $20,000 account might use a 60/40 framework: up to $12,000 allocated to active trading and $8,000 retained as reserve capital.
This is an example of my personal framework, not a universal allocation rule or a guarantee against losses.
Illustrative $20,000 account
$12,000
Active trading · 60%
$8,000
Reserve · 40%
Individual position example
A 10% allocation would represent $2,000 of the account. A standard US equity put with a $20 strike would require $2,000 collateral for one contract.
A 10% allocation would represent $2,000 of the account. A standard US equity put with a $20 strike would require $2,000 collateral for one contract.
A practical preference
Be selective about rolling.
Rolling can be one way to manage a threatened position, but I see it as a considered decision rather than an automatic response to a falling share price.
A
Assess the existing position
I consider the current option value, time remaining, share-price movement and whether the original investment case still holds.
B
Compare the available roll
One approach I consider is moving the expiry further out, sometimes by one or two weeks, where a suitable net credit is available.
C
Consider strike adjustments
Rolling out and down may be worth assessing if the resulting trade offers an acceptable credit and risk profile.
D
Know when to accept assignment
If an appropriate roll isn't available, assignment may be preferable to repeatedly extending a position. I'd only accept it if owning the shares remains acceptable.
A net credit on a roll doesn't mean the overall trade is
profitable. Rolling closes one option and opens another;
it can extend exposure and doesn't remove the underlying
investment risk. I also consider earnings and other major
events before choosing a new expiry.
Put the process into practice
Understand the Wheel before trading it.
Whether you're new to options or developing your existing approach, start with the fundamentals and work through the process at your own pace.
Read the Beginner's GuideContinue learning
Explore the supporting resources
I've put together dedicated guides and practical tools to help explain each part of the method.
Stock Selection
Researching companies and assessing whether their shares are suitable for the Wheel.
Read the guide →Cash-Secured Puts
Understand put contracts, strike selection, collateral and premium.
Read the guide →Covered Calls
Learn how covered calls work after shares have been acquired.
Read the guide →Rolling Options
Explore rolling decisions, credits, expiry changes and assignment.
Read the guide →Capital Allocation
Think about position sizing, cash reserves and portfolio exposure.
Read the guide →Wheel Calculator
Work through collateral, premiums, effective prices and potential returns.
Open the calculator →