How to Trade the Wheel Strategy (Beats Buy-and-Hold in a Bear Market)

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6 окт 2024

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Комментарии : 111

@InTheMoneyAdam 2 года назад

Spreadsheet for FREEeeeEEEeee docs.google.com/spreadsheets/d/1N0b4T3x87dy4_-5L83Za-7EuAzULrlYaBF-sH_aRu9Y/copy#gid=130391767 Like it? Support the channel by grabbing some free stocks in the description!

@benmacgill1662 2 года назад

Hope you and your bro are doing better. Love your videos and glad to see you back on YT more. You've got a whole family here mate!

@InTheMoneyAdam 2 года назад

Do not run it on a cheap stock solely because you can afford it. This leads to bagholding and regret. This strategy is best run in a tax-protected account to avoid wash sales and short term capital gains tax. Don’t hunt for high IV stocks. You’ll convince yourself to buy shit and then cry when it tanks. Enjoy that IV is rising ubiquitously across the market. The main risk of this strategy is bagholding, just like buy-and-hold, except you’re reducing losses through selling premium. love you guys so much. Cash-Secured Puts: m.ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-r_rKof8IdfU.html Covered Calls: m.ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-jnTsQBJHMSk.html

@insertcolorfulmetaphor8520 2 года назад

I'd love a side hustle where Adam and I review financial themed movies, from the good, Wall Street, to the WTF, Other People's Money... Different perspectives... Real lingo from traders, realism of the environment being depicted in the film, historical significance, based on real story inspirations, etc...

@Shempagne 2 года назад

How do you setup a tax protected account?

@KyleBaran90 2 года назад

In Canada, our TFSAs don't allow us to short or use margin (unless selling covered calls), so we don't get to enjoy CSPs unless we use a margin account. Also, one thing I've enjoyed the idea of is using ATM straddles to see what the market has "priced in" for a given expiry.

@alimurtaza299 2 года назад

I just wanna buy leaps :(

@rhoelg 2 года назад

well said with caveat!

@randomguy1221 2 года назад

I watched your first wheel videos around when the pandi crashed everything and made like $12k so thanks for that, now I’m holding shares but would be fun to set aside some money to do this again. Hope you and your bro are feeling better.

@MarkTizzy 2 года назад

Excellent video. Thanks for spending the time on this. People are going to learn so much from this.

@nicolapansini5656 2 года назад

The issue in this market is that 70% OTM can be 40% after a day

@pazuzuxx 2 года назад

Happened to me with QQQ. 😞

@xianxiong3440 2 года назад

The wheel strategy doesn't work in the bear market.

@levirichardson8505 2 года назад

You are uneducated

@mirianadimitrova2112 Год назад

Yep, exactly what I`ve experienced.

@CMike44 Год назад

That doesn't negate the point of running the wheel. If you plan to hold 100 shares anyways, you're getting downside protection by selling calls against it

@poleritude6222 2 года назад

Glad to see new videos going up even if they are probably tough to make. I'll share them around as best I can.

@koniJnr 2 года назад

LFG, thank you! Really awesome seeing you posting dude!

@danhenrichs1856 7 месяцев назад

Great teacher. Makes a complicated subject understanding.

@slicktype001 2 года назад

Dope content as ALWAYS!!!

@impulse4597 2 года назад

Hi Adam, I fount out that short strangle with keeping both side unassigned will be a better strategy, wish you could make a video talking about it

@VideosYTJuan 2 года назад

Great idea.. upload all your videos again and we'll watch them all again.. make sure you can monetize all 👍

@rsouchereau 2 года назад

Hope you're feeling a better man!

@mrgarner11 2 года назад

So great to see vids again. Well wishes.

@bplewniak 2 года назад

Been running a version of the wheel all year and I’m currently down 3 percent this year. I’m a fan of always being paid daily with time decay. If people know option buying is likely the most risky and unprofitable strategy in the stock market, well what does that mean for the seller of options??? People should chew on that for a while.

@agungshafari8355 2 года назад

You the man money I love you man wish you all your healthy better and make more money!!! Miss u man

@Swing4TheRing Год назад

You forgot to add the premium you'd get for selling the CC at $19 to your adjusted basis, thus bringing it down from the adjusted $20 cost basis. You may in fact be able to sell them at $19 depending on the premium credit given and still make money on the entire trade. The cheat in this strategy becomes being able to sell enough CCs without getting assigned so that you effectively bring your cost basis all the way down to $0.

@jonr9574 2 года назад

Fresh board and batten background really quaint my dude

@nicolaspiper3437 2 года назад

Shamelessly rewatching old content to get you more views man, whatever helps the warchest to defeat this bs you’re going through

@jaybit9947 2 года назад

you have the best trading content on youtube! Hope you feel better soon.

@carlpetty7862 2 года назад

I love your videos and rooting for your full recovery. Is this the same video you put out a couple years ago?

@dzogchengrey 2 года назад

The problem with the wheel in a bear market that's dropped this much is that you don't make the insane profits on the upswings. At this point it would be better to buy and hold and sell the rips. If you end up bag holding your gains from wheel wouldn't be a drop in the hat really against potential profit if the stock rises. People selling CC or CSP in August would have missed huge gains. Personally I think there is a mental hiccup when it comes to the wheel because people think they are getting away with something selling a OTM put and it doesn't get assigned. It would be the same as selling a ITM CC (which sometimes offers even more premium). But when people do that and the option gets exercised somehow think they "lost" when it's the same damn thing as a put going unassigned. Selling CC or CSP nets the most premium when sold ATM. And imo should be used to hedge against your other positions should the market start to trend sideways for too long. Other than that you risk missing out on huge profits and only slightly mitigate losses.

@mirianadimitrova2112 Год назад

You`re right, exactly what happened to me. I made $3100 from selling CC and CSP on WBA and BBY, yet had I just bought and hold I could have now sold to a profit of over $7000. But one can never know if the market will go sideways for the next few months, or not, so this could just as easily been the better scenario.

@TritonTv69420 Год назад

Hi Adam, mr options wizard. When you say buy to close you mean buying the same call/put you sold right? Its something to think about when making these vids. I have watched a lot of yours but small explanations like these is where i get lost sometimes.

@bryanpena7268 2 года назад

Awesome video. Your looking great too, best of luck for you and your brother.

@squirrelmaster1225 2 года назад

your audio is over the top, nice work

@TheDon_666 2 года назад

HEY ADAM I HOPE YOU FEEL BETTER THE VALUE YOU PROVIDE IS CHANGING LIVES MY QUESTION IS WHERE YOU GET THAT DRAWING TABLE ??

@InTheMoneyAdam 2 года назад

Huion H950P babyyyyyy

@curtisrader957 2 года назад

Got the same glorious mouse! Glad to see your doing better man

@moero3523 2 года назад

Dud crazy smart. Hope you get well. Bless

@Veteran_Nerd 2 года назад

Classic video. Feel better man!!

@MalikHall 2 года назад

This was a great video! I used to run the wheel strategy, but weekly. I think I will look into doing this in a longer timeframe. Also Is that a Wacom pen and tablet? Been looking for a way to write things digitally.

@InTheMoneyAdam 2 года назад

Huion H950P

@flonetic 2 года назад

If the cost basis on your shares is $20, why would it be ill advised to sell a CC below your CB? If you're selling a CC, you take in a credit which is lowering your CB further on the shares to lower than the strike of the CC. Selling the CC above your CB on the shares doesn't negate wash sales, in the eyes of the IRS the premiums you receive are short-term cap gains, and you're still selling at a loss if you get assigned at $25 and sell at $20.

@MastinoNapoletano420 2 года назад

Because you are not trying to break even, you are trying to build your portfolio. In his previous video he said to do this in a tax protected account like Roth IRA so you don't get hit with short term cap gains.

@flonetic 2 года назад

@@MastinoNapoletano420 That's not my point though. If your adjusted cost basis is $20 and you sell a covered call at $19, the premium you receive reduces your cost basis further below $19 ideally.

@jackfrostiez8009 2 года назад

@@flonetic Yes, the prems you receive can lower your cost basis in a sense.

@jackfrostiez8009 2 года назад

@@flonetic Generally speaking, and for those that are new, the risk of CC below the CB would be if you're most likely getting assigned situation, cuz you'll be forced to sell shares at loss.

@mirianadimitrova2112 Год назад

Wow, I`ve been doing this exact strategy without even know it. My only problem is greed and timing. I started doing this 5 months ago with WBA and BBY and I`m now over +$3100 from premiums, but I could have been +$7000 had I sold my stocks at the right moment and avoiding being exercised (due to WBA and BBY massive recent run up). But still better performance than most in these turbulent times.

@Matt-uj9wl Год назад

On super high IV meme stocks what you are experiencing sounds normal. You get fat premiums due to IV, but sometimes that volatility puts your options far ITM. In my opinion if you are going to trade meme stocks the way you are doing it is the only way I would touch them.

@mirianadimitrova2112 Год назад

@@Matt-uj9wl why do you consider WBA and BBY meme stocks?

@Iheartlifting 2 года назад

It’s also possible for it to expire in the money and you don’t get assigned. Pretty lucky when that happens.

@olsheezy232 2 года назад

Is some of this from other videos? Can you link from where it starts about trading the wheel during a bear market? Thanks

@leebrock4783 2 года назад

It's a repost of a video he did about a year ago. He reposted it cause it's a great video, and times like these can be be good opportunities to use this strategy. That being said, I actually don't understand most of this stuff, and I've watched like 20 vids on options, etc., lol. But this cat seems honest and knowledgeable.

@rudra1087 Год назад

I do not understand why 30 - 45 days out? The graph he shows is true for 30 - 45 days but its also true for any other expiration such as 5 day, 7 days , 15 days etc. Am I missing something..Sorry if its a dumb question. I was thinking why get locked in for 40 days when you can sell multiple cash secured puts weekly. Also in the short term the probability of it going ITM is low.

@signbusa 2 года назад

Thank you for your videos!

@WatchTheThinker 2 года назад

Thanks for this Adam

@travisloewen6191 Год назад

Up here in Canada we have registered accounts (RRSP and TFSA) that give certain tax benefits but also come with limitations. One such limitation is that we can't sell puts, and therefore, can't wheel. 😢 I read somewhere that an in-the-money covered call is very similar to an out-of-the-money cash-sucuree put. I've been trying to work the math out and the main idea seems to work but I'm still unsure about how the actual numbers would compare. Any interest in doing a comparison on this?

@moero3523 2 года назад

Apply on SPX opt futures…what’s your thought mate??

@luisangel8285 2 года назад

Hey Adam, hope you and your brother get well soon. Just a question, have you been browsing Reddit ? There's an account that is using your stuff but you can't be too sure nowadays with all these scammers.

@dhyde9207 Год назад

Did you get this material from Marcus Heitkoetter out of Texas?

@metamoonnn 2 года назад

got caught with some wash sale bs... still don't really understand how :(

@joewalkerjr 2 года назад

Would you be willing to do another short video on the spreadsheet using real numbers from an actual stock? If you are doing the wheel on different stocks, do you use separate spreadsheets for each stock or just have them all on one spreadsheet? I would think it is supposed to be one spreadsheet per stock.

@darrellfritzel7989 2 года назад

Adam, praying you get better dude!

@InTheMoneyAdam 2 года назад

Thanks bro!

@mwint1982 2 года назад

Flip that GoFundMe into $1M babyboy. U got this

@TheOdiumWithin 2 года назад

On step 2. The further down you go away from the money the less credit you make. How do you close for $2.50 and reopen for $3.00 without going up in strike on the same day?

@InTheMoneyAdam 2 года назад

Pushing expiration out

@rayrene 2 года назад

Get well soon.

@RogerDoddCustom 9 месяцев назад

Hi! Is that an E6B Flight Computer in the background? If so, do you have your Private Pilots license?

@InTheMoneyAdam 9 месяцев назад

I was in the process when I suddenly got Autoimmune Encephalitis. I unfortunately don’t think I’ll be able to fly again because of this, especially because I was initially misdiagnosed with bipolar disorder. Needless to say, it hurts every time I see a GA plane fly by because I was exuberantly passionate about flying.

@shainowen2520 2 года назад

Do you hedge your wheel

@gmm3780 Год назад

Are you still buying leaps?

@sonny5982 Год назад

Wow excellent video

@chrish.3348 2 года назад

Great content 👍☺️👍

@josepioquinto2472 2 года назад

Hello brother!

@rileyboomer8627 2 года назад

Only thing I'm going to do is add a column for fees, idk about Robin hood or webull but I use questrade and they charge $15/$20 per options trade

@InTheMoneyAdam 2 года назад

Jesus lord almighty that is expensive bro. TD Ameritrade costs $0.65 per options trade. WeBull and RH is free. You’re killing your gains through commissions, highly advise you switch brokerages

@rileyboomer8627 2 года назад

@@InTheMoneyAdam tha SK for the insight, I paid about $700 in fees last tax return, not sure how canada brokerages differ from US ones but I'm going to look into this

@rileyboomer8627 2 года назад

@@InTheMoneyAdam so after reviewing pretty much all the Canadian broker options I've come to the following findings: Questrade has no monthly fee, but charges $5 per stock trade, and $16 for an options trade (ouch on the options trading) TD Direct investing and Qtrade will do stock trades at a $5 fee and options trades at $10+$1 per additional contract but they both charge a $100 per year account fee for small accounts, billed each quarter (probably better than questrade for wheel strategy) wealthsimple has no trade fees, but does not offer options trading :( big oof, as this makes them unusable. Interactive brokers however is where I finally find something that will work better for me, it seems they do not have yearly account fees, and charge 1 CENT per stock per trade, for large quantities this can add up but is generally ignorable and options trades at $1.25 per options contract. I have never used interactive brokers, but I guess if im going to wheel, I gotta give Interactive brokers a shot. I knew the fees where high, I just didn't realize I could be trading with an order of magnitude less fees (or two orders for stocks). thx for the insight

@rileyboomer8627 2 года назад

and just like that Interactive brokers says I am not allowed to trade options.... fk

@jossuequinonez2467 2 года назад

We love you Adam

@danieldasilva9845 Год назад

Hey Adam, The spreadsheet works great, but I've found one hangup with it: it only works when selling single contracts. If I sell 3 contracts at once, my P/L gets skewed big time. Any thoughts or solutions?

@InTheMoneyAdam Год назад

Im working on an updated version and collaborating with a professional that will address this problem and result in an overall better and more useful tool. I’ll make a video on it and post it to my community feed when it’s done.

@harryzhang1500 Год назад

Hey Adam, sorry this is a pretty late comment. Just want to ask, why do you want to avoid getting assigned? I thought it doesn't matter because we're still gonna collect premiums either way (if assigned thru covered calls, if expired thru a new CSP). so I dun really see the benefits of selling csp at an OTM strike, especially when we receive a smaller premium because of that.

@elvero666 Год назад

If you sell an otm put with a 20-30% delta and still end up getting assigned you are buying a stock that is falling quite drastically, probably even significantly lower than your initial strike. Now ideally you sell calls on that stock above your cost basis (strike of your assigned put), which might be much higher than the current stock price. Strikes that are far above the current stock price generally give very low premiums. You might go for strikes that are below your cost basis in order to collect a more attractive premium, but this is obviously quite risky. Either way just avoiding assignment as much as possible is the quickest and most risk averse way to generate profits.

@diaphanoux Год назад

@@elvero666 Excellent take on assignment avoidance!

@sulaymanbarrow7369 2 года назад

GET WELL COMRADE !!

@jacobtaylor8205 2 года назад

So why not start with with covered calls in this bear market?

@Putseller100 2 года назад

Gotta get the shares in the first place, so either buy them or sell an otm put to get them

@nastynate4481 Год назад

The title seems strange. Doesn't anything beat buy and hold in a bear market.

@NitroReviewsMN 2 года назад

25:30ish did you mute that audio on purpose?

@InTheMoneyAdam 2 года назад

Nope, accident. Missed nothing important, just editing error

@seanflynn781 2 года назад

Let's gooo

@stevenscott5814 2 года назад

I did not see anything about using the wheel strategy during a bear market. The wheel is a bullish strategy that loses money on the stock and on the sold puts in a bear market.

@InTheMoneyAdam 2 года назад

It’s an addendum to buying and holding. Would you rather be holding stocks during a bear market or holding stocks and collecting premium during a bear market? The former loses more money.

@stevenscott5814 2 года назад

I agree that you will lose less money in a bear market using the wheel strategy. However, I prefer to trade the wheel strategy when the stock is trending up based upon moving averages, trend lines, etc. That is still no guarantee of success, but it puts the odds further in my favor. There are always certain stocks and ETFs that are trending up. Thank you for all of your videos, I really enjoy them.

@aaronh1205 2 года назад

@@stevenscott5814 Correct me if I'm wrong, I don't usually trade the wheel strategy. But if you own shares already and the market's moving down, doesn't it make sense to find a nice little bear market rally, then sell a .30 delta covered call near the top? When the bear market continues, you'll be able to buy to close soon thereafter to lock in the premium rather quickly. Then sell again, and again all while it's heading down. True, smarter to just stay out of the market as it goes down. But if it's a stock you like? Perhaps you can profit as the stock takes a breather and just goes sideways as well.

@KyleBaran90 2 года назад

Wheeling is inefficient in both markets since it caps your profits and losses. Every strategy is a tool that is suitable for different investors

@stevenscott5814 2 года назад

@Aaron H-Yes, that makes total sense. You can even get more complex by selling at the money calls when the market gets overbought and selling at the money puts when the market gets oversold using an oscillator like RSI or stochastics. That is what I do, but only in an uptrend since the wheel is a bullish strategy. There are no stocks I like enough to hold during a down trend. 😊

@lslurpeek 2 года назад

SNAP now at 10. That's an issue with the wheel strategy

@InTheMoneyAdam 2 года назад

The risk of the wheel is always bagholding, just like buy and holding. But you’ll always be better off in a bear market trading the wheel on a stock than just having bought a round lot of that company.

@yragus Год назад

During 2020 covid crash, I'm not sure it was a profitable strategy.

@Shakespielberg 2 года назад

Holy Crap, you think this strategy works in a bear market? Just ask anyone who was trading during the Dot Com crash in 2000-2001.

@Putseller100 2 года назад

There is no guarantee the market will keep dropping. It very well may bottom out soon and stay flat for a long time. It may soon bounce up 10% or so. I don’t think the comparisons of the past are much good in current times, the Great Recession crash was about 6 months (late sept 08-early March 09) the current situation began nov 2021 which is 10 months ago, so to compare both situations would mean a big drop which we had than a strong rally which we are well past the 6 month period of the 08-09 crash. So in my opinion the wheel can still be ok, sell the first put further out say 15-25 delta, with more volatility you will still get a respectable premium. If you get assigned adjust the calls in like manor

@InTheMoneyAdam 2 года назад

It’s better than buying the dip if the dip keeps dipping. You get in at a lower price and collect premium when it goes down. Watch my most recent video that is directed at people like you.

@Shakespielberg 2 года назад

@@InTheMoneyAdam I believe you are better off selling vertical or calendar Put spreads, and overall hoping you have many many wins because it will take several of them to offset just one of your losses. Fortunately each of your trades that lose will be capped. However in Your strategy, the result would be that you end up owning (being assigned) the garbage and surprise disasters like FDX or ADBE (both which are still considered 'high quality companies' even though their recent chart losses are _massive_ ), and yet your strategy would gain just pennies on something that "works" in this market like GIS or LLY... 'pennies' because the puts on those today don't have any value and so you'll never get assigned those and thus you'll _never_ own them when they matter, which is right now. Bottom line: you'll get assigned all the garbage, and never the quality; your account will be a minefield of toxic positions, and at best you'll get just tiny _limited/capped_ pieces of any bear mkt rally that occurs. [Post note: I've edited my orig comment to be more respectful. I recognize the effort and work you put into your channel. But in this case I think you are 100% wrong, and this is steering your customers into destruction. But I'm not the teacher. Their account balance is. And that's the only way most people ever learn anything.]