---
name: skill-wheel-strategy
description: Cash-secured put, then covered calls if assigned. Use for the cycle, phase checks, and capital tied up in each phase.
skill_family: options-strategy
last_updated: 2026-09-30
---

# Wheel

## When to use

- The question is the repeating cycle, not a one-off put or call.
- Someone needs to know which phase a position is in.

## Setup

- Phase 1: sell a cash-secured put. Collateral follows the cash-secured put playbook.
- Phase 2: after assignment, sell covered calls against the shares.
- A cycle names premium use and size. It does not assume the next expiry will match the last one.

## Rules of thumb

- Put phase keeps full cash collateral. Call phase keeps the share inventory.
- Name the current phase before proposing the next contract.
- Transition triggers are assignment, expiry, or a roll. State which one applies.

## Pitfalls

- Starting the call phase without the shares.
- Starting another put while the cash is still reserved for an open put.
- Reinvesting premium into a name the holder would not want to own through a decline.

## Disclaimer

Options involve risks and are not suitable for everyone. Read *Characteristics and Risks of Standardized Options* at OptionsEducation.org, or from your broker or the Options Clearing Corporation, before using this structure. Examples omit commissions, fees, margin, interest, and taxes. This is a structured playbook for education. It is not a signal, a recommendation, a solicitation, or a broker order.