The wheel, explained from the beginning.

Warren Buffett got paid $7.5 million to wait

From Omaha to your phone

The idea has not changed in thirty years; only the size has. Buffett promised to buy five million shares. You promise to buy one hundred — one contract — on a stock you would be happy to own anyway. You are paid for the promise the moment you make it, and the cash to keep it sits in your own account. On any given day, popular names pay 5% or more of that cash for a promise that lasts about forty days:

That is the quiet magic of selling a put: the market pays you for patience. Steady names pay less — an Apple or Microsoft put pays closer to 1% a month — and faster-moving names pay more precisely because they move more. The whole craft is choosing which promises to make, and how big.

For an American this can feel ordinary. For millions of people around the world it is anything but. To collect income from the world’s largest companies, from your own account, on your own phone, used to require a desk in New York. Today it requires a broker that accepts you, a few thousand dollars set aside, and the discipline to keep the promises small.

That is the dream made practical: a young engineer, a shopkeeper, a parent building a retirement account early — anyone, anywhere — running the same wheel, one contract at a time.

One wheel, day by day

That is the spirit behind everything we send: helping ordinary people, anywhere, get paid to wait for prices they like — carefully, one contract at a time.

How the US equity market works

When you buy a stock (also called a share or equity), you buy a small piece of a public company. When you sell a put, you promise to buy that piece at a price you name. Everything on this page sits on top of a few basics about how the market itself works.

Key things to know

• Trading hours: the regular US session runs 9:30am–4:00pm New York time. For traders in Vietnam that is 8:30pm–3:00am (winter) or 9:30pm–4:00am (summer). Our morning alert is sent before the open, so you can place it in the evening, your time.
• Two exchanges, one clearinghouse: stocks list on the NYSE or Nasdaq; every listed option is cleared by the OCC. The SEC oversees both. Quotes are public and the same for everyone.
• Lots of 100: one option contract covers 100 shares. A $105 put means a promise to buy 100 shares at $105 — $10,500 of cash set aside.
• Settlement: when a put is assigned, the shares arrive in your account the next business day and the cash you set aside pays for them. There is no bill and nothing to borrow — the money was already there.

What a put really is (the house analogy)

An option is a contract about a price. A put is the version where you promise to buy at a set price by a set date — and are paid for the promise. If you have ever bought or rented a house, you already understand it.

In one sentence: a cash-secured put pays you now for promising to buy a stock you want, at a price you like, with cash you already have.

Now the two contracts the wheel uses:

• Put: a promise to buy at the strike. You sell it, cash-secured, to get paid while you wait for a price you like — step one of the wheel.
• Call: a promise to sell at the strike. You sell it on shares you already own — covered — to get paid while you wait for a price to sell at. Step three of the wheel.

The wheel, step by step

The wheel is four steps that repeat. Two of them collect premium; two of them move you between cash and shares. Every step is a promise you are paid for, and every turn of the wheel pays you.

• 1 · Sell a cash-secured put. Name a price you would be happy to pay for a stock you want. Collect the premium now. Keep the cash to buy 100 shares ready in your account.
• 2 · Buy at a discount, or keep the premium. If the stock never reaches your strike, the put expires and you keep the money — go back to step 1. If it does, you are assigned: you buy at your price and still keep the premium.
• 3 · Sell a covered call. Now that you own the shares, promise to sell them at a higher price by a set date, and collect a premium for that too.
• 4 · Sell at a gain, start again. If the stock rises through your call strike, the shares are called away at a profit and you keep every premium along the way. If not, keep the shares, keep the premium, sell another call. Either way the cash comes back to step 1.

Cash-secured puts in detail

Step one of the wheel deserves its own lesson, because it is where most of the premium — and most of the decisions — live. Four things to understand: the cash, the math, closing early, and what happens if you are assigned.

Cash-secured means the money is already there

You set aside enough cash to buy 100 shares at the strike: for a $50 strike, $5,000 per contract; for a $105 strike, $10,500. No margin, no borrowing, no surprise bill. If you are assigned, the shares are paid for with money that was sitting in your account all along.

Strike, premium, break-even, cushion

The strike is the price you promise to pay. The premium is what you are paid per share, times 100. Your break-even is strike minus premium — the real cost if assigned. Your cushion is how far the stock can fall before the trade loses money: the gap between today’s price and break-even, as a percentage.

Closing early: half the premium in a third of the time

You do not have to hold to expiration. Most of our exit alerts close the put early — typically when you have captured about half the premium in a third of the time. Buying the put back for less than you sold it locks in the gain, frees the cash to do it again, and improves your win rate, because the stock has less time to move against you.

Assignment and rolling

If the stock is below your strike near expiration, you will be assigned: you buy 100 shares at the strike and keep the premium. Because we only send stocks worth owning, this is step two of the wheel, not a failure. The alternative is to roll — buy back this put and sell a later one, usually at a lower strike, for more premium. The exit alert tells you which of the two makes sense that day.

Covered calls — getting paid while you own the shares

Once you own 100 shares — usually because a put was assigned — you sell someone the right to buy them from you at a higher price by a set date, and you are paid for that right. If the stock stays below that price, you keep the shares and the premium and do it again. If it rises above, your shares are sold at that price — a gain — and you still keep the premium.

Choose a strike above your cost basis

Your cost basis is what the shares really cost you: the put strike minus every premium collected so far. We choose call strikes at or above that number, so that if you are called away, it is at a profit. A call below your basis pays more today but locks in a loss tomorrow.

Being called away is the good ending

If the stock rises through your call strike, the shares are sold at the strike and you miss the extra upside. That is the trade-off for the income — and it is the wheel completing a turn: shares bought at a discount, sold at a gain, three premiums kept, cash back in hand for the next put.

When the shares are underwater

Sometimes the stock keeps falling after assignment and no call above your basis pays enough. Then the right move is often to wait, or to sell a call at the basis for a small premium while the stock recovers. The Plan-a-call tool shows which strikes lock in a gain and which would lock in a loss — and tells you to wait rather than sell a losing call.

Reading an options chain as a put seller

An options chain is the menu of every available contract for a stock. The first time you see one it looks like a wall of numbers. Every alert we send can be checked against it in under a minute once you know which five columns matter.

The basic layout

• Expiration dates — chains are grouped by expiry. For cash-secured puts we usually look 30–45 days out: enough premium to be worth it, little enough time for the stock to wander.
• Strikes run down the middle — calls on one side, puts on the other. Today’s price sits between the strikes; puts below it are the ones a wheel trader sells.
• Each row is one contract — the same strike and date on the put side and the call side are different contracts with different prices.

The columns that matter most

• Bid / Ask — buyers offer the bid, sellers ask the ask. When you sell a put you are paid near the bid; the mid-price is what our alerts quote. The gap between them is the spread.
• Open interest — how many contracts exist at that strike and date. Hundreds or thousands means you can get in and out cleanly; a few dozen means you may have to work the order.
• Volume — contracts traded today. High volume with low open interest is a young, active contract; both low is a contract to avoid.
• IV rank — where today’s implied volatility sits against the past year, 0–100. Higher rank means premiums are rich for that stock; we prefer to sell puts when it is elevated, not when it is flat.
• Days to expiration — the window. Premium ÷ cash ÷ days is how we compare one alert with another.

Reading it in practice

Say HOOD trades at $109.71 and the alert names the $105 put expiring Oct 30. Open that expiration, find the $105 row on the put side, and read across: bid 6.70, ask 7.05, open interest 203. The mid is $6.88 — the number in the alert. Place a limit order at the mid or slightly below the ask, and let it fill.

The numbers behind a put

You do not need to be a mathematician to run the wheel, but four numbers explain almost everything about why a put is priced the way it is — and why we pick the ones we pick.

Delta — roughly, the chance of being assigned

A put’s delta tells you how much its price moves when the stock moves $1, and it doubles as a rough probability of finishing in the money. A 0.30-delta put is assigned roughly three times in ten; a 0.15-delta put roughly one time in seven. Lower delta means a bigger cushion and a smaller premium. Most of our puts sit around 0.20–0.30 delta.

Theta — the income that arrives every day

Theta is how much an option loses in value each day just from time passing. For a buyer that is a cost; for a put seller it is the income. It accelerates in the last month of a contract, which is why 30–45 day puts pay so well per day, and why closing early after most of the decay has happened is often the best trade.

IV rank — when the market is paying up

Implied volatility is the market’s expectation of how much the stock will move. IV rank places today’s level against the past year, from 0 to 100. When it is high, puts are expensive and the seller is paid well for the same cushion. We prefer selling into elevated IV rank and sizing smaller when it is extreme, because it is usually high for a reason.

Return for the window — and annualised

Premium ÷ cash set aside is the return for the window: $688 ÷ $10,500 = 6.6% for 43 days. Multiplying by 365 ÷ 43 gives about 56% annualised — a useful way to compare a 29-day put with a 43-day one, but not a promise about the year. Some windows pay less, and an assignment ties the cash up longer.

Understanding the risks (don’t skip this)

Selling puts is one of the oldest income strategies in the options market, used by pension funds and insurers for decades. It is also a real risk, and the people who last are the ones who respect it. Here is what can go wrong, and what we do about each one.

• The stock crashes. If a stock falls far below your break-even and stays there, you own shares at a loss and covered calls only recover part of it. This is the real risk of the wheel. We answer it with the screen (strong fundamentals, growth), the earnings rule, and the sizing rule.
• Concentration. Three puts on three chip stocks are one big chip bet, not three positions. The planner caps each name at a share of your account and flags names that move together.
• Opportunity cost. If a stock you sold a call on rockets, your shares are sold at the strike and you miss the rest. That is the price of the income; choosing strikes above your basis makes sure the miss is still a profit.
• Cash tied up. An assignment turns cash into shares that may take weeks to be called away. Keep two or three positions, not ten, so a slow one does not stop the wheel.
• Liquidity. A wide spread can cost you a meaningful slice of the premium on the way in and out. Check open interest and the spread before every order — the live board shows both.

Trading US markets from outside the US

Many members — in Vietnam and across Asia — want to run the wheel on US stocks but are not sure how. The main thing you need is a broker that accepts non-US residents and lets you sell cash-secured puts and covered calls.

Brokers for international access

Interactive Brokers accepts clients from Vietnam and most other countries, offers US stocks and options with low commissions, supports the order types the wheel needs, and has a strong mobile app. Apply online with a passport, proof of address and basic financial information; approval usually takes a few days. Fund it by international wire in your local currency and IBKR converts to USD at a low rate.

What you’ll typically need

• Proof of identity and address (varies by country), and a way to wire funds in your local currency
• Options trading permission — request it when you apply. Cash-secured puts and covered calls are the lowest-risk tier and are usually approved for anyone with basic investing experience
• A phone with the broker’s app, so the evening alert becomes a two-minute order wherever you are

Sizing a wheel account

If there is one lesson that separates members who last from members who blow up, it is this one. The wheel’s edge means nothing if one assignment can take your whole account. Sizing is the planner’s job, but you should understand the rules it follows.

1. Cash per contract is fixed by the strike

Before anything else, know what one contract costs to secure. The Income track keeps most names in the $20–$70 range so that one contract fits a modest account:

Because the cash is set aside, the worst case is known before you enter: you own 100 shares at the strike. Only sell a put whose cash you would be comfortable turning into shares.

2. Cap each name at a share of the account

Two rules the planner applies to every alert:

• Single-name cap: no one stock takes more than about 25–35% of the account in cash set aside. On $20,000 that is one contract of a $50–$70 name, never a $105 one.
• Keep cash free: aim to have 20–30% of the account not promised at any time, so an assignment does not leave you unable to take the next alert.

3. How many alerts to take?

Alerts arrive almost every trading day; you are not meant to take all of them. Take the ones whose cash fits your rules and skip the rest — frequency is not the goal, sizing is. A member with two open positions and free cash is in a better place than one with six and none.

4. How many open positions?

Total risk matters more than any single trade. A common guideline by account size:

Two extra cautions: correlation (three chip stocks is one bet, not three) and earnings (never let two positions report in the same week). The planner flags both.

5. The policies that hold it all together

• Decide the exit before you enter. Our exits are rules — close at about half the premium, roll or take the shares below the strike — not feelings. Follow the exit alert.
• Never sell a put on a stock you would not want to own. The premium is never a reason by itself.
• Keep the cash where it belongs. Cash set aside for a put is not available for anything else until the put is closed.
• Log every trade. Your journal and the ledger should agree; the wheel is a business, and businesses keep books.
• Add capital, not leverage. The wheel grows by adding cash and letting premium compound, never by borrowing against it.

Quick glossary

• Premium — what you are paid for selling an option, quoted per share; multiply by 100 for one contract.
• Strike price — the price you promise to buy (put) or sell (call) at.
• Cash-secured put — a put you sell with the full cash to buy 100 shares already in your account.
• Assignment — being made to keep the promise: you buy 100 shares at the put strike (or sell them at the call strike).
• Covered call — a call you sell on 100 shares you already own.
• Called away — your shares being sold at the call strike because the stock rose through it.
• Break-even — strike minus premium: the real cost of shares if assigned.
• Cushion — how far the stock can fall from today before the trade loses money.
• Roll — buying back the current option and selling a later one, usually for more premium.
• LEAP — an option with a year or more to expiration; in Supercharge, long-dated calls bought with premium the wheel has already paid.