Finding Winning Stocks For The Wheel Strategy

Intro: 0:00
5 Steps To Finding Stocks: 1:13

How do I find 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.

5 Steps:
1) Looking for stocks with high volatility = Higher Premium.
* Step 1 of The Wheel is selling Puts.

barcharts.com is a tool I use to measure volatility for stocks.

2) No earnings before Expiration
3) Make sure stocks are in an overall uptrend or have strong support.

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.

4) Check The Wheel Calculator.

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

5) Place The Trade.

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

Recommended Videos:
The Options Wheel Strategy:    • The Options Wheel Strategy  

#StockMarket #OptionsTrading #Stocks
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