Maximizing Returns with the Options Wheel Strategy Using Real-Life Examples

okay it's official I have a brand new favorite wheel stock we've talked about the stock before but it's officially now my favorite stock to do the wheel with we're going to talk about that also two very very valuable I've been making some in the money covered calls and people on the Discord are like whoa which happened a lot when the market was up but now the Market's down it really hasn't happened in a while so I want to talk about like times where you can place an in the money covered call meaning your strike is below the current share price and why the hell you would ever possibly want to do that so getting right into this guys first my favorite wheel stock is definitely Google it has been as far as like premiums versus investment a hands down now granted guys I know nine thousand dollars is a lot of money but the wheel isn't about like diving into these big stocks right I've been Wheeling now for five six years and I started with 20 stocks ten dollar stocks so Google is like a bigger play for me that took years and years of building up to so please you know don't get in the comments and tell me who has nine like build up to it instead of complaining just build up to it please because when you do you'll see some benefits and what I've seen is not every ninety dollar stock has the premiums that Google has it just checks all the boxes for me with maybe the exception of the dividend when it comes to the wheel stock but this is just a quality stock that I've just been making money on I I really I it's easy the price action is pretty standard it goes up it goes down it's easy to manage it's got high liquidity it's easy to roll just freaking awesome and here we are looking at it it's currently up today so today would have been a good covered call day but guys right now you can see I have a put open I actually got a sign on Google a couple weeks back when I was sick and I missed assignment I couldn't roll it things happen and I actually got a sign let's go to the history I got assigned at 92 and here's really how that 92 assignment really happened we can go back and I've talked about Google I'm going to make a full video guys next week about how much money I've made the whole year trading the wheel with this portfolio but consistently in the 80 range when you are going to be selling calls 82.81 this one was a hundred and sixty one dollars and I was able to buy back for three that was a huge one 66 at 98 then I bought that one back for seven so that was another 59 then I sold uh 65 at 91. now that didn't really work out for me so I needed to roll so I rolled it up to 92 I got 10 more dollars so now we're at 75 and then I needed to roll it again and I got another 25 and this is where I got assigned at 92. now when I get assigned at 92 my goal with the wheel is to now go back and purchase puts at 92. right that's going to keep my bases about the same it makes math easier so what I did is I went right back in and I sold a put for 92. I got another 29 and I bought to close that one for two dollars I then sold another put for 92. at 11. it did not get a sign so these I'm not really looking to roll that much unless I really really can and we'll see that in a second so I wanted to get assigned to nine two I want those Google Shares back this one expired worthless I kept that entire bag I sold another put for now a hundred and eleven dollars and gosh I want that assigned but what happened was Google tumbled in the last couple days if we can go back let's go back now and see what happened there this right here in the last week this was an awesome week if you are trying to write puts so right here here's where I would have got to sign it but 92 at the beginning this week I'm like whoa whoa whoa Miss Lippy if this thing's gonna continue to downtrend I am going to roll down if I could take the opportunity to get even more premium and then also get these at a lower price than I sold them so what I did was took that 92 strike that had an expiration of 1216. you can see that here I bought to close that for 207 it was in the money it was expensive I had to buy it back but the beautiful thing here was if we look I was able to roll down to 91 that releases a hundred dollars worth of collateral and then if I get assigned I really made a hundred dollars on my last assignment if that all makes sense I got to lower my strike by a hundred dollars and push it out and get six more dollars so now this whole entire process here is a hundred and Seventeen dollars and if I get assigned at 91 that is awesome news now we can see with Google they've gone down since then and now they're trading at 89 but this doesn't expire until the end of the week so it's not that big of a deal I I don't mind getting assigned at 91. but if this continues to pull back I'm gonna roll it down again maybe I'll get it for 90. but this is guys the beauty of being able to roll stocks and understanding that wheel once the wheel gets assigned it's kind of a good thing because you know exactly where you need to go back to right I got assigned at 92 the puts at 92. simple for me no big deal and like I said right now that's up fifty dollars for me what's today today is the 21st so this is going to expire in a couple days on Friday this is beautiful I don't I want to get a sign on my puts my calls I tend to roll them I don't really want to get assigned on them it's kind of annoying for me swbi is a different animal and we'll talk about that in two shakes of a land sale but listen Google I I'm so glad that I built up shares on it I am so glad that I built up shares on it and I think this is going to be a stock that I'm just going to continue to wheel into the future guys I do have a long call on meta which is as you can see in the crapper with this portfolio guys I'm gonna be getting of all my leaps this portfolio is going to become strictly a wheel portfolio in 2023 so subscribe if you're into the wheel strategy I'm going to show you what I can turn twelve thousand dollars into I'm really gonna go for almost uh 50 to 75 return and I think I can do it on this portfolio I'm not gonna put any money in we're gonna start at like 12 grand and I'm gonna make this thing easily I'm gonna get it up to 20. in 2023 I promise you that the other stocks that I hold 100 shares of that I can wheel right now Camping World is up today let's write a call on it let's do it if you guys don't know how to do this all right this is a green day it's up two and a half percent we want to be able to write calls on green days here's the the threshold and and here's everything and I got a dividend coming from them let's go camping world see my average cost is 25.50 if you're new to the wheel that's your first Benchmark as far as where strikes should be for me I have an adjusted basis I know mine's a little bit lower but for all intents and purposes in this video I'm going to use that 2550 and I will not write a strike below that and I can't lose so what I'm going to do let's go trade options we are going to want to sell calls against it if I look at 25.50 right now that ain't getting me Jack diddly let's go down to this one right here will that get me Jack to delete that'll get me a dollar as well now here's where it's going to get a little bit more advanced guys I know what I'm doing and I know that my adjusted basis meaning my base is after my dividends and all the premiums that I've had for selling this is actually below the current share price but to be safe I'm gonna find myself a nice 0.2 Delta that's going to make things easy for me to manage also you have to understand this is the time before Christmas I'm going to be busy I'm going to be drinking I'm probably not going to watch the markets so what we'll do is we're going to see what I can get here I can get eight dollars for a 23 strike to me guys that's not worth it if I want to check the markets next week I can don't rush into calls you don't need need to like I said I have to know myself and I know that I'm going to be busy between the holidays and I'm not going to be able to roll if this goes against me so I'm just going to push it aside and we'll wait to the following week swbi guys is what I'm selling in the money calls on we can see my current basis for this stock in particular I think it is 15 that is not true I've held 100 shares of Smith and Wesson for a very very long time I mean when was it 15 it pretty much hasn't been 15 this whole year Well in August it spiked up and hit 15 but it's been down the whole year and really what this has happened is now the options if we look at the options they are monthlies which is really really annoying and also too if we look at the strikes anything out of the money is really just not worth it I love camping I love swbi they are in my dividend portfolio but as far as Wheeling it's just not that great so you can see right here I wrote an in the money call on this minus one I sold a call I got a bunch of money it's below the current share price I want to get it signed and then I'm pretty much going to say thank you so much swbi you've been a great wheel stock we had a great time together but I think it's time we part ways knowing that my adjusted basis is below 750. so keep a spreadsheet guys keep spreadsheets and understand what your basis is are below and then you can make these plays to make a little bit more money I write in the money calls when I'm ready to move on from a stock that's generally the only time I'm going to do it is when I'm ready to get assigned because like I said on calls I don't really want to get a sign but I will let it happen if a I think I'm going to roll it and I want to get some heavy premium or B I want to get rid of the stock and move it out of this portfolio like what I want to do with swbi until I see you guys in the next one stay positive work really really hard always please be kind to others guys happy holidays I hope you enjoy yourself be safe out there nothing good happens after midnight and I'll check you on the next video

Channel: Brad Finn

Views: 24,438

Keywords: Brad Finn, Brad Finn options, Brad Finn wheel strategy, how to trade the wheel strategy, what is the best stock for trading the wheel strategy, wheel stocks, cheap wheel stocks

Id: __qt3OQnkwc

Length: 9min 59sec (599 seconds)

Published: Fri Dec 23 2022