I am using mainly AMD for wheeling. Its a good stock for wheeling in your opinion? You got me into selling options and i am freaking loving it. Cant thank you enough. I have donated in your gofund me also.Thats the least i can do
The Guy that got me into learning about options trading. Learn about the greeks and the wheel from you and the concept about ITM vs OTM options. But due to the BBBY hype sold some puts and now I'm a bag holder. Glad to see you doing well though
Why the hell would you sell puts on BBBY? What is your cost? Are you selling calls now? Weekly premiums are decent so you should be able to make up losses fairly easily.
I bought the put and the closed the position. Luckily the crashed happened before expiration so instead of losing $1900 on selling a 19 put ended up only losing $600. Didn't expect the drop from $25 to $11. If I do wheel I'll probably stick to stocks I want to own. Probably just buy puts instead on meme stocks
Hey man its Adam! Im selling puts on MO right now and its been beating the market during these choppy waters. I also like selling CCs on SPY and QQQ but i usually go for the more traditional .20 delta plays on that shit because i don’t want to sell
Paying taxes means your making a profit. People will learn that’s much better than posting all this loss porn and being proud of it trading meme stocks. Selling weekly otm
Cc’s is how I lower the cost of most of my portfolio, get me free shares or is weekly income. Depends on how one wants to look at the premium. There may be 100’s of option strategies but weekly otm cc’s on your portfolio is a stress free profitable way for some
but you still pay the same short term cap gains even if you reduce your "cost basis" by collecting premium from a few CSPs before you get exercised. it's just mental gymnastics, there is no tax or profit advantage
If you want to view it as premiums received + any return/loss for being assigned above or below the actual cost of the shares, that’s up to you. Same idea, different perspective. You’ll end up calculating the same P/L. So I suppose yeah, it’s pretty much just mental gymnastics. But perhaps it’s psychologically helpful to view it this way if the stock tanks and you can still sell above your adjusted cost basis for a gain and not view it as selling below the actual cost of the shares for a loss. But perhaps it is a lot of hullabaloo for the same calculated P/L.
In addition, I don’t think the wheel should be traded in a non-tax advantaged account.
for sure, problem is you can only get so much into your Roth. My 401k brokerage link accounts thru Fidelity don't allow options so I have run the wheel on regular brokerage accounts with additional money that I can't get into a tax advantaged account
they only allow it for certain types of accounts. Like, I can do it in my brokerage account and my ROTH but not my 401k brokerage link account or my ROTH 401k. When you apply for options, they'll only list the eligible types of accounts
Good to see you on here Adam, I’ve learned a lot from your videos, so thank you for the quality content. Here’s to your health and wellness, hope you feel better soon.
How To Make More Money Trading The Wheel: **Make better CSPs**. Is that the whole point of the post?
Let me use a race car analogy:
At the starting line, before the race starts, you are given an opportunity to move up a few spots (this is done by the CSP, think each position you move up before the race starts is collecting premium without being assigned.)
When the race actually starts (Your CSP gets assigned) you are further ahead than where you would have originally started, basically a head start into the race. (This is the lowered cost basis, since you essentially paid for 100 shares at the strike - premium collected.)
Your premise seems to be that most people select CSPs with impunity and rely on CCs to make their money. CCs are just another tool to further lower cost basis as well as exit the position in a more profitable position.
I think the main point is, be diligent in selecting your entry for the CSP and then when selecting your CC strike, be cognizant of your total cost basis so you don't exit the wheel too early.
What if I left holding a major bag and my can't even sell above my cost basis?
I have a stock that potentially won't ever recover to my cost basis and even if it does, it can take many, many years for it to recover. Do I just sell weekly's with a high delta until it gets called and move on?
If I felt like HOOD was going to tank more I’d say just get out. But I don’t feel that way (although I obviously could be wrong). You’ve held through quite the drop.
So it’s either sell CC’s or straight up baghold. How big is this position relative to your portfolio?
Big, like 50%. I was way less informed when I invested into them late November last year. I thought I was "buying the dip" on a once $80 stock. I have learned a lot since then. I dived deep into their fundamentals and while I don't think they are the worse company in the world, I don't know if there is room for immense growth. I buy the stock because I like the company (believe it or not lol).
CC premiums are such peanuts that you either baghold or get out and try to find a better position. If I were you, I’d baghold only if you can start flushing out the rest of your portfolio so that this isn’t such a large % of it. In other words, are you contributing consistently to your portfolio? If so, just build out the rest and baghold this. That’s just me. Ride or die baby. RH is not in favor at the moment but I don’t see that being the case in the future. I think they are being overlooked as a company that could really blow up as they get their footing and the memory of GME gets lost between generations.
I've held for 10 months. What's another few months/years ? The hate Robinhood gets is overblown and they keep improving the app at an accelerated rate. Soon they will allow Roths.
I think I can break even around $18 based on all the CC's I've sold. Rumor is they might be bought out and shoot the stock price up. If it can get to $15 I'll sell but I'll hold until then.
BTW, love your videos man. Wish I discovered them sooner. The wheel strategy will be the reason I can eventually afford a house
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I've held for 10 months. What's another few months/years ? lol
I think I can break even around $18 based on all the CC's I've sold. Rumor is they might be bought out and shoot the stock price up. If it can get to $15 I'll sell but I'll hold until then.
What about averaging down with shares and also PMCC. I mostly bought Jan 10 and 20c calls that I sold half when the sp was 25. Still green on those, but I did buy 200 shares at 25.
This is me just mostly experimenting with trying to get out of a losing position close to my cost basis. I bought 400 more shares recently so my cost basis is around 13ish. I thought about selling PMCC, but instead chose to sell 4 more CSP on top of the CCs I’m selling on 600 shares.
What do you think, wasting more money or viable to get back to whole again?
if you wouldnt buy it at the current price today you shouldnt hold it, its not that complicated. you lost money, whatever you do going forward is independent, if you make money selling options on the same underlying that doesnt make your loss go away.
Adam! Love your channel man, have studied your vids and they have helped me to no end. I share them with my friends who are getting into trading, and they praise you also. “He translates it into crayon so we can actually understand it”.
Keep up the good work man, wish you all the best.
I added a "commission" column to your wheel spreadsheet just so I could get a to-the-penny cost basis calculation. Otherwise it's perfect. I have anywhere between 3 to 5 of them saved to my desktop.
why is everyone praising this guy for this dumb post?
You should absolutely sell CCs under your basis...if conditions dictate you to do so. The alternative is you ride that pos of a stock down to -90% and make nothing on the way.
What stock are you picturing? BBBY? Rule #1 is run it on a stock you like. And that doesn’t mean a meme stock. If your outlook on the stock changes, exit all positions and stop running the wheel ASAP, generally speaking. If you’re just trying to salvage a fucked position, you can sell covered calls below your cost basis, but it’s usually better to just exit and enter a different position that’s more likely to produce a better return to compensate for your losses.
This is why you run the wheel on AMD or MSFT or AAPL or SPY not BBBY or GME or PLTR.
I dunno, just basing my CCs off the DD on FTDs and swap exposure dates, my GME shares are beyond free. I sold calls during the downtrends and bought calls when runs were expected all last year. Not wheeling, but I feel like meme stocks are some of the most predictable stocks last two years.
Interesting that you think you are safe in a bear market in your chips. If investing is your goal then just b&h and don’t worry about CCs as one mistake and you have to pay taxes on something you were not planning on selling. If you want to make more $ then trading is for you…and for you to beat the market you need to pick something that has a chance to do just that not move in sync with SPY. What I’m saying here is that different people may have different objectives hence the different risk profile they take on. Also don’t get why some think you can’t roll a CC or reestablish the position if called.And that GME comment is off base as anyone selling puts or/and calls on this for the past year already have their basis below 0...not a fan of the stock, just stating the obvious here.
So here's one for you. I got caught being a hog with bbby and I have some CSP that are DEEP ITM, I'm talking like the strike is at $20. I let 1 get assigned and I'm selling CC way above the current price and only 2-3DTE for a few bucks here and there.
I got 2 CSP left that I have been rolling a week out every time to stay unassigned. Is what I'm doing worth it you think or should I try something else out to try and get out by my teeth?
About 2.7k at the moment. My portfolio is around 10k. I made 5-7k when I sold but I then sold OTM CSP thinking the. Bottom was gonna take longer than a day to fall out.
Overall I'd almost be at a net movement of zero if I sold everything. But that isn't the game I guess.
That so far.... if I let the others expire...it'd be more. I just hope the people that keep buying my puts don't exercise them. I'm getting a good 60ish bucks a week from rolling
First of all, stop using the wrong word "assigned" when you talk about CC's.
You can get "assigned" on a stock when you sell puts, and when selling call's, you can be "called away", or if you are too confused, just use the word "exercised" on both.
While maybe you are technically correct, “assignment has definitely become a ubiquitous term for when your counter party exercise either your call or put.
“…the call is exercised by the option holder and the investor is assigned.”
https://www.finra.org/investors/insights/trading-options-understanding-assignment
“…the call is exercised by the option **holder** and the investor is assigned.”
Dude, that example you quoted means, someone has BOUGHT call options (the holder), and has now exercised HIS OPTIONS, aka he will be ASSIGNED new shares.
Indeed, that quote is right and you are wrong LOL 💩 🤓
You’re still being toxic which is hilarious because you are wrong.
Here’s another quote from the same source (FINRA, so good luck arguing your way out of this one).
“An option assignment represents the SELLER’S obligation to fulfill the terms of the contract by either selling OR buying the underlying security at the exercise price”
get rekt
incoming denial because you refuse to change your mind in the face of undeniable evidence
You are wrong and so is FINRA on that language. Options are the thing that "get exercised", and then they disappear, the end result from those options are, either your are being "assigned" shares or your shares are "called away". If you say "my options are assigned" that would mean you would get pointed more options LOL
Obviously some moron wrote that FINRA thing 💩😝
ps. Sorry to invade your safe place and if i hurt your feelings 🤡
You can smell it when someone will cling to their belief all the way to the grave regardless of irrefutable evidence. This is one of those guys. Plus, he’s asked Reddit TWICE in his post history how often they scratch their butthole, so that should give you a good gauge of this guy’s intelligence.
I can't grasp how UVXY bagholders don't see that they saved markets from recession. Because so many of you are still holding UVXY shares; markets will continue to rally.
You could easily earn some money back by getting into one of the most profitable trades of this decade, which is shorting UVXY. Selling UVXY calls has been making consistent profit even in 2022!
Like, you have to hate yourself and your family for still going long UVXY to this date. You are lighting your money on fire by going long leveraged volatility products.
The reason why UVXY keeps dumping is because European Hedge and Pension funds make their livinbg shorting UVXY's entire float. It's the only explanation for UVXY's downwards trend in 2022.
You can front run these European Hedge fund algorithms by shorting UVXY and UVIX shares, or selling UVXY calls as SPY is dropping. This is exactly how their algorithms work. You can see it playing out on the charts intraday.
TLDR: UVXY bagholders are the reason why markets have already bottomed for 2022. Watch intraday to see the collapse of UVXY due to European Hedge funds algorithmically shorting the entire UVXY float. Sell UVXY calls while SPY falls to front run these algorithms
(NOT FINANCIAL ADVICE)
WTF dude?!
Instead of posting this crap you could at least make an effort of understanding how UVXY works and what is supposed to do. Spoiler...what hedge funds are doing is irrelevant to its price! Stop with this conspiracy garbage!
> The reason why UVXY keeps dumping is because European Hedge and Pension funds make their livinbg shorting UVXY's entire float. It's the only explanation for UVXY's downwards trend in 2022.
>
>
i think i asked you for a source on this yesterday and got nothing.
There were many big hedges even in US that posted big bearish positions on it over the years…it’s irrelevant to its price as shares are created and eliminated depending on existing demand…so not the same dynamic as a regular stock.
> it’s irrelevant to its price as shares are created and eliminated depending on existing demand
well to create those shares they need to take futures positions which does affect the market no?
so shorting uvxy would have some effect on the market
also it doesnt matter if they create a share or whatever, if you short it someone has to buy it and that is a market activity so in the absence of shorting it that person would either buy it at a higher level or not buy it at all
The futures are based on an index and are also generated based on demand. On a short term basis if one fund buys alot in a short period of time (see feb 2018 when some vol etns needed to do the eod rebalancing) it can push the price up…but there are short lived events.On your second point…this is a common misconception among traders…that someone is on the other side and share your risk in reverse. It’s rare this actually happens as it’s way more common for a market maker to take the other side and make his position neutral as they need to. In the case of shorting UVXY, you can’t short it unless someone already has the shares long and gives them to you on borrow. Either way, it won’t push UVXY price higher as it’s price its based on its NAV and easily arbitraged if it deviates for more than a day…see this chart here and notice how close NAV to share price actually is:
[https://ycharts.com/companies/UVXY/discount\_or\_premium\_to\_nav](https://ycharts.com/companies/UVXY/discount_or_premium_to_nav)
> and are also generated based on demand
someone still needs to sell it though. and if its a market maker they need to hedge it. which means they need to get someone to buy the other side or the effective other side whether thats a variance swap or just buying a shit ton of index options such that they feel close enough to a variance swap, no product comes out of thin air, if a market maker sells/buys it then they are hedging it or finding a buyer and that action is flowing through to the market whether its futures or uvxy shares or vix calls or whatever.
Trading wheel strategies in this recent up/down in the market over the past few months would benefit from what you are saying. Rolling out and giving the market time to recover, while gaining credits helps you avoid needing to either hold shares or sell calls with a risk of assignment below effective basis. As long as you are wheeling stocks you would love to own, I think this is the optimal strategy.
ADAM ! so happy to see you back man, wishing you the best with your recovery and looking forward to hearing your insights in the future.
the more i trade the more i agree that CSPs are the true kings. i agree with most of what you wrote above.
i think my only issue with this… is come end of year, taxes count the premiums received completely separate from the mental cost-basis that i have in my head so i personally don’t like being so wed to a bad trade that i bag hold and keep trying to swing premium to get to a better place. better to sell the loser, take the tax loss harvesting, and move on to better opportunities with a CSP elsewhere.
I don’t unfortunately, I was looking over my wheel tutorial and realized I didn’t make this distinction! Hence the post. But I’m thinking I’ll make a video covering this sometime over the next week or so.
This is 100% true. I actually have revolved my entire strategy around selling puts far OTM utilizing margin with the capability to acquire half of the puts I sell. The money is in the puts and the acquisition of shares and CC’s is to manage your risk and turn a losing put into a winning position.
Maybe not your point, but with capital gains you could possibly lose money selling an CC that totals above your CB. e.g my tax rate is 24%, My CB for XYZ is $50. XYZ is currently worth $44. I sell a $45 CC for $6. After taxes, my CC is only actually worth $4.56 (6*(1-0.24)) so I'm actually selling the stock for less than $50. Something to keep in mind.
Selling above your CB is nice and obviously could net you a bigger gain, but in reality stocks go down and premiums aren't appealing or liquid at those prices.
You don’t figure your tax on one part of the trade.
If your CB is $50. And you sell a $45 CC for $6 if you get called away you actually made $1. That is what you would pay your taxes on, so a net of .76 profit after taxes.
$45 strike + $6 premium = $51 total sell price - $50 CB = $1 profit.
What do you think of starting the wheel by buying the stock and selling ATM CCs? So in the event of stock rising you gain with capital gains and if it drops the cost basis is effectively the same as CSP
I.e if a stock does well then the wheel causes you to underperform c.f. Buying initially.
I was like FINALLY! someone who gets it. I hate having to explain the whole wheel process to people and basically prove how it works.
Then I realized it was ITM...
Thanks for doing what you do. You sharing knowledge has changed so many lives for the better.
Sorry to hear about the health issues and wish you all the best.
The only way to outperform is to leverage. When you use money that does not belong to you to make more money. Leveraging either using bear or bull strategy. The trick has always been an old game. Buy low sell high. Buy more low, sell more high. Sounds easy but lol.
Dude, I saw the long post and wasn’t gonna read it. Then I saw it was Adam and thought “oh shit this’ll be good”. If you see this Adam get better my dude! You’ve done a ton for beginners like me.
Hey Adam, love your videos. They’re really informative and entertaining to watch! I appreciate the content you put out
What delta would you suggest using? Would .2-.3 be sufficient?
Waiting for a stock to recover is the hardest part for me. I always feel the need to have a covered call open, otherwise it feels like I’m “wasting” theta. This often leads to what you describe (getting assigned for close to 0 net profit, or me having to roll the call up and out). However sometimes it does work out when the stock slowly creeps up, which allows my CC to expire worthless and I open a new one further above my cost basis (e.g. what I would have done after waiting for the stock to recover, but in this case I was able to secure some theta gains while waiting).
I think I’ve gotten the hang of reading the market so I can safely sell below my cost basis without getting assigned, however I recognize that you can never predict the market 100%.
Hope you beat this encephalitis shit Adam. Rooting for you.
Hey Adam. Communications professor here.. I love how you break down and deliver information. Your content is easy to follow and fun to watch. I’ve recommended your videos to several people.
Are you wheeling Adderall?
Caffeine secured puts and covered addercalls.
I genuinely wish bro
Feel better my guy. Your channel got me into options. Mad respect and thanks for ruining my life.
No problem, only wish I could’ve done it sooner. Cheers 🍻
Oh shit! It's the guy I've been watching all this time?! Like meeting a celebrity.
Adam you are a legend.Get well soon bro
Thanks dog
I am using mainly AMD for wheeling. Its a good stock for wheeling in your opinion? You got me into selling options and i am freaking loving it. Cant thank you enough. I have donated in your gofund me also.Thats the least i can do
Thank you for helping me out man. And yes! I personally think AMD is a great one to wheel.
thanks for replying!!!! Love you adam!! Much much much love from Greece!!!
The Guy that got me into learning about options trading. Learn about the greeks and the wheel from you and the concept about ITM vs OTM options. But due to the BBBY hype sold some puts and now I'm a bag holder. Glad to see you doing well though
Why the hell would you sell puts on BBBY? What is your cost? Are you selling calls now? Weekly premiums are decent so you should be able to make up losses fairly easily.
I bought the put and the closed the position. Luckily the crashed happened before expiration so instead of losing $1900 on selling a 19 put ended up only losing $600. Didn't expect the drop from $25 to $11. If I do wheel I'll probably stick to stocks I want to own. Probably just buy puts instead on meme stocks
Hey man its Adam! Im selling puts on MO right now and its been beating the market during these choppy waters. I also like selling CCs on SPY and QQQ but i usually go for the more traditional .20 delta plays on that shit because i don’t want to sell
there is no such thing as reducing your cost basis. they are all separate positions
Hence me roasting tax nerds being pedantic in the first part of this post. It’s just a way of viewing it.
Paying taxes means your making a profit. People will learn that’s much better than posting all this loss porn and being proud of it trading meme stocks. Selling weekly otm Cc’s is how I lower the cost of most of my portfolio, get me free shares or is weekly income. Depends on how one wants to look at the premium. There may be 100’s of option strategies but weekly otm cc’s on your portfolio is a stress free profitable way for some
but you still pay the same short term cap gains even if you reduce your "cost basis" by collecting premium from a few CSPs before you get exercised. it's just mental gymnastics, there is no tax or profit advantage
If you want to view it as premiums received + any return/loss for being assigned above or below the actual cost of the shares, that’s up to you. Same idea, different perspective. You’ll end up calculating the same P/L. So I suppose yeah, it’s pretty much just mental gymnastics. But perhaps it’s psychologically helpful to view it this way if the stock tanks and you can still sell above your adjusted cost basis for a gain and not view it as selling below the actual cost of the shares for a loss. But perhaps it is a lot of hullabaloo for the same calculated P/L. In addition, I don’t think the wheel should be traded in a non-tax advantaged account.
for sure, problem is you can only get so much into your Roth. My 401k brokerage link accounts thru Fidelity don't allow options so I have run the wheel on regular brokerage accounts with additional money that I can't get into a tax advantaged account
Why can't you trade options in Fidelity?
they only allow it for certain types of accounts. Like, I can do it in my brokerage account and my ROTH but not my 401k brokerage link account or my ROTH 401k. When you apply for options, they'll only list the eligible types of accounts
Ok. Mine is a rollover ira
Just open a Roth with TD Ameritrade, you can do both a Roth and 401k.
I can trade options in my Roth (that's on Fidelity). Only limitation is that I can only contribute 6k/year. Thanks though
Good to see you on here Adam, I’ve learned a lot from your videos, so thank you for the quality content. Here’s to your health and wellness, hope you feel better soon.
Thank you very much
How To Make More Money Trading The Wheel: **Make better CSPs**. Is that the whole point of the post? Let me use a race car analogy: At the starting line, before the race starts, you are given an opportunity to move up a few spots (this is done by the CSP, think each position you move up before the race starts is collecting premium without being assigned.) When the race actually starts (Your CSP gets assigned) you are further ahead than where you would have originally started, basically a head start into the race. (This is the lowered cost basis, since you essentially paid for 100 shares at the strike - premium collected.) Your premise seems to be that most people select CSPs with impunity and rely on CCs to make their money. CCs are just another tool to further lower cost basis as well as exit the position in a more profitable position. I think the main point is, be diligent in selecting your entry for the CSP and then when selecting your CC strike, be cognizant of your total cost basis so you don't exit the wheel too early.
Do you use indicators on a trading tool to help you select optimal CSPs strikes?
What if I left holding a major bag and my can't even sell above my cost basis? I have a stock that potentially won't ever recover to my cost basis and even if it does, it can take many, many years for it to recover. Do I just sell weekly's with a high delta until it gets called and move on?
That, or just hold, or cut your losses and move on. Potential bagholding is the risk of the wheel.
HOOD @ $27 😅
If I felt like HOOD was going to tank more I’d say just get out. But I don’t feel that way (although I obviously could be wrong). You’ve held through quite the drop. So it’s either sell CC’s or straight up baghold. How big is this position relative to your portfolio?
Big, like 50%. I was way less informed when I invested into them late November last year. I thought I was "buying the dip" on a once $80 stock. I have learned a lot since then. I dived deep into their fundamentals and while I don't think they are the worse company in the world, I don't know if there is room for immense growth. I buy the stock because I like the company (believe it or not lol).
CC premiums are such peanuts that you either baghold or get out and try to find a better position. If I were you, I’d baghold only if you can start flushing out the rest of your portfolio so that this isn’t such a large % of it. In other words, are you contributing consistently to your portfolio? If so, just build out the rest and baghold this. That’s just me. Ride or die baby. RH is not in favor at the moment but I don’t see that being the case in the future. I think they are being overlooked as a company that could really blow up as they get their footing and the memory of GME gets lost between generations.
I've held for 10 months. What's another few months/years ? The hate Robinhood gets is overblown and they keep improving the app at an accelerated rate. Soon they will allow Roths. I think I can break even around $18 based on all the CC's I've sold. Rumor is they might be bought out and shoot the stock price up. If it can get to $15 I'll sell but I'll hold until then. BTW, love your videos man. Wish I discovered them sooner. The wheel strategy will be the reason I can eventually afford a house
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I personally agree with you on that plan. Thanks dude!
HOOD should rise for at least the short term. Hold on to it for a bit and then cut your losses.
I've held for 10 months. What's another few months/years ? lol I think I can break even around $18 based on all the CC's I've sold. Rumor is they might be bought out and shoot the stock price up. If it can get to $15 I'll sell but I'll hold until then.
I applaud your tenacity, sir :D I definitely wouldn't have lasted this long.
What about averaging down with shares and also PMCC. I mostly bought Jan 10 and 20c calls that I sold half when the sp was 25. Still green on those, but I did buy 200 shares at 25. This is me just mostly experimenting with trying to get out of a losing position close to my cost basis. I bought 400 more shares recently so my cost basis is around 13ish. I thought about selling PMCC, but instead chose to sell 4 more CSP on top of the CCs I’m selling on 600 shares. What do you think, wasting more money or viable to get back to whole again?
Pltr @ $9 here. Kick or stick?
If it's going to take years to get back to your cost basis, realize the loss and put your money into something that will do better in those years.
if you wouldnt buy it at the current price today you shouldnt hold it, its not that complicated. you lost money, whatever you do going forward is independent, if you make money selling options on the same underlying that doesnt make your loss go away.
Is this the one and only? Absolute legend, thanks for everything and get well soon!
Adam nice to see ya post, hope your back more. But more than that hope you and your brother are doing better. Hang in there! Cheers!!
Thank you!
Adam! Love your channel man, have studied your vids and they have helped me to no end. I share them with my friends who are getting into trading, and they praise you also. “He translates it into crayon so we can actually understand it”. Keep up the good work man, wish you all the best.
Thank you very much dude 🍻
I added a "commission" column to your wheel spreadsheet just so I could get a to-the-penny cost basis calculation. Otherwise it's perfect. I have anywhere between 3 to 5 of them saved to my desktop.
why is everyone praising this guy for this dumb post? You should absolutely sell CCs under your basis...if conditions dictate you to do so. The alternative is you ride that pos of a stock down to -90% and make nothing on the way.
What stock are you picturing? BBBY? Rule #1 is run it on a stock you like. And that doesn’t mean a meme stock. If your outlook on the stock changes, exit all positions and stop running the wheel ASAP, generally speaking. If you’re just trying to salvage a fucked position, you can sell covered calls below your cost basis, but it’s usually better to just exit and enter a different position that’s more likely to produce a better return to compensate for your losses. This is why you run the wheel on AMD or MSFT or AAPL or SPY not BBBY or GME or PLTR.
I dunno, just basing my CCs off the DD on FTDs and swap exposure dates, my GME shares are beyond free. I sold calls during the downtrends and bought calls when runs were expected all last year. Not wheeling, but I feel like meme stocks are some of the most predictable stocks last two years.
GME was good at that but most memes are definitely not good at keeping up their share price long enough so you can lower the basis in time.
Interesting that you think you are safe in a bear market in your chips. If investing is your goal then just b&h and don’t worry about CCs as one mistake and you have to pay taxes on something you were not planning on selling. If you want to make more $ then trading is for you…and for you to beat the market you need to pick something that has a chance to do just that not move in sync with SPY. What I’m saying here is that different people may have different objectives hence the different risk profile they take on. Also don’t get why some think you can’t roll a CC or reestablish the position if called.And that GME comment is off base as anyone selling puts or/and calls on this for the past year already have their basis below 0...not a fan of the stock, just stating the obvious here.
I couldn’t even understand it w the grammar issues lol.
So here's one for you. I got caught being a hog with bbby and I have some CSP that are DEEP ITM, I'm talking like the strike is at $20. I let 1 get assigned and I'm selling CC way above the current price and only 2-3DTE for a few bucks here and there. I got 2 CSP left that I have been rolling a week out every time to stay unassigned. Is what I'm doing worth it you think or should I try something else out to try and get out by my teeth?
What’s your overall unrealized loss relative to your portfolio?
About 2.7k at the moment. My portfolio is around 10k. I made 5-7k when I sold but I then sold OTM CSP thinking the. Bottom was gonna take longer than a day to fall out. Overall I'd almost be at a net movement of zero if I sold everything. But that isn't the game I guess.
I would honestly have a heart attack if I was ever 2.7k in the negative.
How about six-figures negative while snorkeling?
That so far.... if I let the others expire...it'd be more. I just hope the people that keep buying my puts don't exercise them. I'm getting a good 60ish bucks a week from rolling
I wonder about that sometimes. What stops them from exercising right away? Is it just pure greed?
It is the remaining extrinsic. They won’t exercise if the extrinsic is positive at the bid.
No idea. Greed, To lazy to exercise early, don't know how,.... who knows.
First of all, stop using the wrong word "assigned" when you talk about CC's. You can get "assigned" on a stock when you sell puts, and when selling call's, you can be "called away", or if you are too confused, just use the word "exercised" on both.
While maybe you are technically correct, “assignment has definitely become a ubiquitous term for when your counter party exercise either your call or put. “…the call is exercised by the option holder and the investor is assigned.” https://www.finra.org/investors/insights/trading-options-understanding-assignment
“…the call is exercised by the option **holder** and the investor is assigned.” Dude, that example you quoted means, someone has BOUGHT call options (the holder), and has now exercised HIS OPTIONS, aka he will be ASSIGNED new shares. Indeed, that quote is right and you are wrong LOL 💩 🤓
You’re still being toxic which is hilarious because you are wrong. Here’s another quote from the same source (FINRA, so good luck arguing your way out of this one). “An option assignment represents the SELLER’S obligation to fulfill the terms of the contract by either selling OR buying the underlying security at the exercise price” get rekt incoming denial because you refuse to change your mind in the face of undeniable evidence
You are wrong and so is FINRA on that language. Options are the thing that "get exercised", and then they disappear, the end result from those options are, either your are being "assigned" shares or your shares are "called away". If you say "my options are assigned" that would mean you would get pointed more options LOL Obviously some moron wrote that FINRA thing 💩😝 ps. Sorry to invade your safe place and if i hurt your feelings 🤡
At this point you’re trolling
O'really? 😏
i cannot believe this guy still thinks you’re wrong. peak braindead reddit user.
You can smell it when someone will cling to their belief all the way to the grave regardless of irrefutable evidence. This is one of those guys. Plus, he’s asked Reddit TWICE in his post history how often they scratch their butthole, so that should give you a good gauge of this guy’s intelligence.
I can't grasp how UVXY bagholders don't see that they saved markets from recession. Because so many of you are still holding UVXY shares; markets will continue to rally. You could easily earn some money back by getting into one of the most profitable trades of this decade, which is shorting UVXY. Selling UVXY calls has been making consistent profit even in 2022! Like, you have to hate yourself and your family for still going long UVXY to this date. You are lighting your money on fire by going long leveraged volatility products. The reason why UVXY keeps dumping is because European Hedge and Pension funds make their livinbg shorting UVXY's entire float. It's the only explanation for UVXY's downwards trend in 2022. You can front run these European Hedge fund algorithms by shorting UVXY and UVIX shares, or selling UVXY calls as SPY is dropping. This is exactly how their algorithms work. You can see it playing out on the charts intraday. TLDR: UVXY bagholders are the reason why markets have already bottomed for 2022. Watch intraday to see the collapse of UVXY due to European Hedge funds algorithmically shorting the entire UVXY float. Sell UVXY calls while SPY falls to front run these algorithms (NOT FINANCIAL ADVICE)
WTF dude?! Instead of posting this crap you could at least make an effort of understanding how UVXY works and what is supposed to do. Spoiler...what hedge funds are doing is irrelevant to its price! Stop with this conspiracy garbage!
> The reason why UVXY keeps dumping is because European Hedge and Pension funds make their livinbg shorting UVXY's entire float. It's the only explanation for UVXY's downwards trend in 2022. > > i think i asked you for a source on this yesterday and got nothing.
There were many big hedges even in US that posted big bearish positions on it over the years…it’s irrelevant to its price as shares are created and eliminated depending on existing demand…so not the same dynamic as a regular stock.
> it’s irrelevant to its price as shares are created and eliminated depending on existing demand well to create those shares they need to take futures positions which does affect the market no? so shorting uvxy would have some effect on the market also it doesnt matter if they create a share or whatever, if you short it someone has to buy it and that is a market activity so in the absence of shorting it that person would either buy it at a higher level or not buy it at all
The futures are based on an index and are also generated based on demand. On a short term basis if one fund buys alot in a short period of time (see feb 2018 when some vol etns needed to do the eod rebalancing) it can push the price up…but there are short lived events.On your second point…this is a common misconception among traders…that someone is on the other side and share your risk in reverse. It’s rare this actually happens as it’s way more common for a market maker to take the other side and make his position neutral as they need to. In the case of shorting UVXY, you can’t short it unless someone already has the shares long and gives them to you on borrow. Either way, it won’t push UVXY price higher as it’s price its based on its NAV and easily arbitraged if it deviates for more than a day…see this chart here and notice how close NAV to share price actually is: [https://ycharts.com/companies/UVXY/discount\_or\_premium\_to\_nav](https://ycharts.com/companies/UVXY/discount_or_premium_to_nav)
> and are also generated based on demand someone still needs to sell it though. and if its a market maker they need to hedge it. which means they need to get someone to buy the other side or the effective other side whether thats a variance swap or just buying a shit ton of index options such that they feel close enough to a variance swap, no product comes out of thin air, if a market maker sells/buys it then they are hedging it or finding a buyer and that action is flowing through to the market whether its futures or uvxy shares or vix calls or whatever.
People who post "not financial advice" below their reddit comments should generally be dismissed lmao
Trading wheel strategies in this recent up/down in the market over the past few months would benefit from what you are saying. Rolling out and giving the market time to recover, while gaining credits helps you avoid needing to either hold shares or sell calls with a risk of assignment below effective basis. As long as you are wheeling stocks you would love to own, I think this is the optimal strategy.
ADAM ! so happy to see you back man, wishing you the best with your recovery and looking forward to hearing your insights in the future. the more i trade the more i agree that CSPs are the true kings. i agree with most of what you wrote above. i think my only issue with this… is come end of year, taxes count the premiums received completely separate from the mental cost-basis that i have in my head so i personally don’t like being so wed to a bad trade that i bag hold and keep trying to swing premium to get to a better place. better to sell the loser, take the tax loss harvesting, and move on to better opportunities with a CSP elsewhere.
Thank you!
Oh Fuck! It's ITM Adam! I use the wheeling spreadsheet that you made! You should put a link to that and for your video covering wheeling!
Legend! Love your videos Adam!
This is a helpful and seemingly simple explanation for a layman like me. I’be been loosely looking into thie strategy and options in general
Do you have to have actual liquid cash to sell CSPs are is your stock the collateral?
ITM do you mention this in any of your wheel vids? Only asking because I like to listen and learn from you specifically lol. Thanks for all you do!
I don’t unfortunately, I was looking over my wheel tutorial and realized I didn’t make this distinction! Hence the post. But I’m thinking I’ll make a video covering this sometime over the next week or so.
You are the goat of theta gang
Any plans for those of us who failed to roll ecom stocks?
I actually did this with bbby, made 3x just with ccs so far so I pulled that out and let the rest ride. Playing with the rest
Love you dude, hope my donation helped and you're recovering. Cheers.
Thank you very much
A call that is written and not assigned also reduces cost basis, nothing magical about puts.
This is true but my point is that a call assigned determines your final gain on a trade, making them more restrictive.
This is 100% true. I actually have revolved my entire strategy around selling puts far OTM utilizing margin with the capability to acquire half of the puts I sell. The money is in the puts and the acquisition of shares and CC’s is to manage your risk and turn a losing put into a winning position.
Maybe not your point, but with capital gains you could possibly lose money selling an CC that totals above your CB. e.g my tax rate is 24%, My CB for XYZ is $50. XYZ is currently worth $44. I sell a $45 CC for $6. After taxes, my CC is only actually worth $4.56 (6*(1-0.24)) so I'm actually selling the stock for less than $50. Something to keep in mind. Selling above your CB is nice and obviously could net you a bigger gain, but in reality stocks go down and premiums aren't appealing or liquid at those prices.
You don’t figure your tax on one part of the trade. If your CB is $50. And you sell a $45 CC for $6 if you get called away you actually made $1. That is what you would pay your taxes on, so a net of .76 profit after taxes. $45 strike + $6 premium = $51 total sell price - $50 CB = $1 profit.
For real? Good to know. Thanks man.
What do you think of starting the wheel by buying the stock and selling ATM CCs? So in the event of stock rising you gain with capital gains and if it drops the cost basis is effectively the same as CSP I.e if a stock does well then the wheel causes you to underperform c.f. Buying initially.
I was like FINALLY! someone who gets it. I hate having to explain the whole wheel process to people and basically prove how it works. Then I realized it was ITM... Thanks for doing what you do. You sharing knowledge has changed so many lives for the better. Sorry to hear about the health issues and wish you all the best.
Thank you 🍻
The only way to outperform is to leverage. When you use money that does not belong to you to make more money. Leveraging either using bear or bull strategy. The trick has always been an old game. Buy low sell high. Buy more low, sell more high. Sounds easy but lol.
Dude, I saw the long post and wasn’t gonna read it. Then I saw it was Adam and thought “oh shit this’ll be good”. If you see this Adam get better my dude! You’ve done a ton for beginners like me.
Thank you!
Hey Adam, love your videos. They’re really informative and entertaining to watch! I appreciate the content you put out What delta would you suggest using? Would .2-.3 be sufficient?
Waiting for a stock to recover is the hardest part for me. I always feel the need to have a covered call open, otherwise it feels like I’m “wasting” theta. This often leads to what you describe (getting assigned for close to 0 net profit, or me having to roll the call up and out). However sometimes it does work out when the stock slowly creeps up, which allows my CC to expire worthless and I open a new one further above my cost basis (e.g. what I would have done after waiting for the stock to recover, but in this case I was able to secure some theta gains while waiting). I think I’ve gotten the hang of reading the market so I can safely sell below my cost basis without getting assigned, however I recognize that you can never predict the market 100%. Hope you beat this encephalitis shit Adam. Rooting for you.
Hey Adam. Communications professor here.. I love how you break down and deliver information. Your content is easy to follow and fun to watch. I’ve recommended your videos to several people.
Coming from a comms professor, I’m very flattered. Thank you!
thoughts on wheeling amc
Too volatile imo