I have been doing wheeling for some time but feels like not worth the time and work.
Also it is difficult to select good and stable stocks to wheel on. I have been doing telecommunications stocks like AMT, VZ, comcast and Chtr but was burned by chtr and “riskier” stocks like robinhood and other LETFs.
How do you really know the stocks you selected won’t suffer from declining business and therefore declining stock price?
If the stock you selected is volatile enough you might as well just buy on dip or do some swing trading.
Usually stocks with higher Iv come with higher risks, stocks that are more stable has less IV.
Wheeling also takes significant effort up to like 10x work vs just buy the dip and hold. It is also difficult to truly master the skills and understand the technicalities / nuances of options. There are just too many variables
It is difficult to execute wheeling in practice.
When a stock crashes down hard you cannot sell CCs as your cost basis is way out. If you do sell CCs below your cost basis then you risk selling the stock at a loss when it gets called away or missing out on gains when the stock rebound strongly. There are couple of times I missed out gains when the price shot up above my CCs. The opportunity cost is significant enough to be several weeks worth of wheeling premiums.
If you sell CSPs, you may end up buying a stock at a much higher price.
Has anyone compared the returns of wheeling vs buy&hold / buy on dips or DCA?
Posted by SadComparison9352