Professional Wheel Strategy Calculator

Calculate your potential returns using real market data with professional-grade Black-Scholes analytics and live API integration. Free options trading tool for cash-secured puts and covered calls strategy.

Calculate Your Wheel Strategy Returns

Your Projected Returns

Monthly Return

Annual Return

5-Year Total
$0
$0

Performance vs Market

Wheel Strategy (Net Returns)

S&P 500 (10.5% historical avg)

10.5%

These calculations use real market data when available or professional Black-Scholes simulations. Past performance does not guarantee future results. Options trading involves significant risk.

Real Market Examples Based on Current Data

Live calculations based on current market conditions and historical volatility data from major US stocks

Note: These examples use real market data from January 2025. Returns are theoretical and based on 30-day option cycles with 95% put strikes and 105% call strikes on $10,000 investment.

How The Wheel Strategy Works - Step by Step Guide

Sell Cash-Secured Puts

Sell put options on quality stocks you'd like to own, collecting premium income while waiting for assignment. You need 100% cash collateral.

Get Assigned (Sometimes)

If the stock falls below your strike price, you buy 100 shares at that predetermined price - often below current market value.

Sell Covered Calls

Once you own shares, sell call options against them to generate additional premium income while holding the stock.

Repeat The Cycle

Whether shares get called away or not, restart the wheel with fresh put options to maintain consistent income flow!

Options Trading Education

Understanding Greeks

Delta measures price sensitivity, Gamma shows delta changes, Theta represents time decay, and Vega indicates volatility sensitivity. Our calculator shows all Greeks for informed decisions.

Risk Management

Never risk more than 5% of your portfolio on options. Use stop-losses, diversify across multiple stocks, and always have an exit strategy before entering any trade.

Market Volatility

Higher volatility means higher premiums but also higher risk. Our calculator uses real historical volatility data to provide accurate option pricing models.

Timing Strategies

Rolling options 7-14 days before expiry often maximizes returns. Avoid earnings weeks unless you want higher volatility and premiums.

Tax Implications

Options profits are typically taxed as short-term capital gains. Consider holding periods and consult a tax professional for your specific situation.

Platform Selection

Choose brokers with low options fees (typically $0.50-$1.00 per contract), good execution, and reliable platforms. Commission costs impact your returns significantly.

Frequently Asked Questions

For most stocks, you need enough cash to buy 100 shares (one contract). For example, AAPL at $185 requires $18,500. However, you can start with lower-priced stocks like Ford (F) at around $1,000-$1,500 for 100 shares.

Our calculator uses real market data and professional Black-Scholes pricing models. However, actual results depend on market conditions, execution timing, bid-ask spreads, and broker fees. Use these as estimates, not guarantees.

You'll own the stock at your put strike price. You can either hold and sell covered calls to reduce your cost basis over time, or sell the stock at a loss. This is why it's crucial to only wheel stocks you'd want to own long-term.

For puts, choose strikes 5-10% below current price (out-of-the-money). For calls, choose strikes 5-10% above your cost basis. Closer strikes = higher premiums but higher assignment probability.

Main risks include: assignment during market crashes, missing out on big upward moves, time decay if holding too long, and potential losses if the underlying stock performs poorly long-term.

Most traders use 30-45 day cycles, as this balances premium collection with time decay. Some prefer weekly options for more active trading, while others use 60-90 days for less frequent management.

The wheel can work in bear markets as volatility increases premiums. However, you'll likely get assigned more often and may hold declining stocks longer. Consider defensive stocks or ETFs during market downturns.