Finding The Best Stocks For The Options Wheel Strategy | Coffee With Markus | Episode 73

Intro: 0:00
Market Recap: 2:15
Viewer Questions: 8:30
Finding The Best Stocks For The Options Wheel Strategy: 11:30
Deep Dive Q&A: 30:15
Q: How do you draw the support line? 37:45
Q: If your account is double, why do we double position size instead of number of positions? 39:03
Q: So would you suggest staying away from entering a stock position using PXO strategy? 41:10
Q: For the wheel do you allow it to expire ITM or would you prefer to close the option at a slight loss prior to expiration? 44:02
Q: If your stock does not get assigned, do you let it expire? 45:32

Show Notes: https://www.rockwelltrading.com/coffee
Options Wheel Strategy

Show Notes: https://www.rockwelltrading.com/coffee
Options Wheel Strategy    • The Wheel Options Strategy - A Comple...  

Finding The Best Stocks For "The Wheel" Strategy

One of the most important things to remember when looking for stocks to trade using the options wheel strategy is this: you MUST be okay owning the stock. This strategy although conservative can potentially risk assignment of options contracts.

If you’d like to learn more about this amazing strategy, feel free to check out our Options Wheel Playlist. (LINK HERE)

When selecting stocks that are right for the Options Wheel Strategy there are a few select criteria that need to be met

Higher Volatility In Options - This is important because the first part of this strategy involves selling premium in the form of put options. One of the tools I use to find options with high volatility is Barcharts.com. When using this platform or any other to find your stock, you have to remember the following:

Find stocks with 30-50% volatility.
Trade stocks in the $30-$200 range.
Choose contracts with 7-21 DTE (Days To Expiration)

Avoid stocks that are approaching earnings reports. During earning season there can potentially be an increase in the volatility of the underlying stock. This type of risk is not suitable for the Wheel Strategy.

Select stocks that are trending upward generally, or have strong support.

Check the Wheel Calculator. This calculator can be used to determine position size based on your account value and cost of options premium.

For more information on the Wheel Calculator, check it out here https:www.rockwelltrading.com/wheel

As we review the positions taken, I’m going to discuss the previous criteria and how I’ve applied them to each trade.

The profitable trades recommended in this video are part of my newsletter alerts that are sent out when I identify high-probability trades. You can sign up for the newsletter here www.rockwelltrading.com/wheel

The last thing that you have to do after finding the right options contracts is to execute the trade!


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