What is an ideal wheeling strategy that has worked out well for folks? Like how many days out and what percentage premium should you be targeting?
I am mostly planning on sticking with large cap tech stock to do this like AMZN, NVDA, Google etc. because these are the ones that I’ll be comfortable holding, even if I am not able to close them with covered calls.
Posted by After_Kale_3602
1 Comment
The 30-45 day window is the sweet spot for theta decay really kicking in. Anything longer and you’re just sitting there watching paint dry while hoping the stock doesn’t wander off, and under two weeks the premiums get thin unless you’re chasing earnings.
I don’t target a specific percentage, I scan for where the 0.20-0.30 delta puts are landing and see if the annualized return makes sense against just holding shares. With the names you listed the IV isn’t usually high enough to get a fat premium on a weekly anyway, so the monthly cycle gives you more room to manage if it moves against you.
Just make sure you’ve actually run the numbers on what “comfortable holding” means when one of them drops 15% in a month and your cost basis is suddenly way above the current price. That’s the part most people gloss over until it happens.