The wheel is an increasingly popular strategy for investors that want to generate income before and possibly during stock ownership. The wheel's primary objective is not to own stock. The strategy's goal is to consistently take in credit via selling short put options.
How do I know if my wheel is a stock wheel?
If you’re looking to learn the diameter of your stock vehicle wheels – sometimes thought of as wheel height, or how tall the wheel is – the easiest method is to review your tire size information. The final number in your tire size (before the separate load index and speed rating) denotes both tire and wheel size.
Can you run a Wheel Strategy on penny stocks?
In order to successfully execute the wheel strategy, you have to be able to trade stocks that are liquid and have an active options market. While some prefer the lower risk of penny stocks, you will likely not be able to run the wheel strategy on penny stocks because they may not have active options.
Are all stock wheels the same width?
Sometimes the four stock wheels and tires on a vehicle are the same width. This is called a “square” setup. A “staggered” setup is a case in which the wheel and tire widths at the front and rear axles are different. For more information see Staggered vs. square tire and wheel setups. How wide or narrow should your new wheels be?
