What is option Wheel Strategy?

The option wheel strategy combines selling options and owning stock in an attempt to maximize profit. Keep reading to learn more about the wheel strategy and how to become successful at trading options . How do you use a wheel strategy? The wheel strategy uses a combination of trades to collect premium.

Is the Wheel Strategy a low-risk method of trading?

All traders want to earn the highest returns possible on their investments, and many of them consider the wheel strategy as a low-risk method of trading. By “wheeling a stock,” or using the wheel strategy with a specific stock, you are placing a bet on the future of the company.

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.

What are the best stocks for the Wheel Strategy?

The best stocks for the wheel strategy depends on an investors risk tolerance. We believe in sticking with blue chip companies and highly liquid ETF’s. Consumer staples stocks and stocks with a high dividend yield are also fairly low stress trades for the wheel.