Frequently Asked Questions
Get comprehensive answers about options trading, the wheel strategy, and our platform
Learn about covered calls, cash-secured puts, premium yield, delta, IV rank, and probability of profit
Wheel Strategy
What is the Wheel Strategy?
The Wheel Strategy is a two-step options income approach: you sell cash-secured puts to collect premium, and if you’re assigned shares, you sell covered calls against the stock. That creates a repeatable cycle of premium collection, with assignment simply moving you to the next step. The Wheel Strategy is an options trading approach that involves selling cash-secured puts to collect premium income, and if assigned, selling covered calls on the acquired stock. This creates a continuous cycle of premium income generation. It's one of the most popular income-generating strategies for options traders.
How do I start with the wheel strategy?
Start the wheel by selling cash-secured puts on stocks you’re comfortable owning, using filters to match your risk and fundamentals. If you’re assigned, transition to selling covered calls on the shares. The core is stock selection and consistent position management, not chasing the highest premium. To start with the wheel strategy, begin by selling cash-secured puts on stocks you're willing to own. Use our screener to find high-yield put opportunities with good fundamentals. If assigned, you then sell covered calls on the stock. The key is selecting quality stocks and managing your positions effectively.
What stocks work best for the wheel strategy?
The best wheel candidates are liquid, established stocks with steady options volume and enough volatility to pay premium without being purely speculative. Prioritize fundamentals (e.g., reasonable valuation and balance sheet strength) and liquidity so you can enter/exit efficiently. Use filters to narrow to quality names you’d actually own. The best stocks for the wheel strategy are liquid, established companies with moderate volatility. Look for stocks with good fundamentals (reasonable P/E ratios, strong balance sheets), high option volume, and consistent premium income. Our screener helps you filter for these characteristics.
How do I manage risk with the wheel strategy?
Manage wheel risk by sizing positions conservatively, diversifying across tickers/sectors, and keeping cash available for assignment. Many traders cap a single position around 5–10% of the portfolio and avoid concentrating exposure in one name. Your filters should reflect your risk tolerance before you ever place the trade. Risk management includes diversifying across multiple stocks, setting position size limits (typically 5-10% of portfolio per position), using stop-loss orders, avoiding over-concentration in any single sector or stock, and maintaining cash reserves for assignment. Always use our filters to match your risk tolerance.
Covered Calls
What is a covered call?
A covered call is when you own shares and sell a call option on them to collect premium. In exchange for that income, you may have to sell your stock at the strike price if assigned—so your upside can be capped above the strike. Covered calls are the second phase of the wheel strategy after assignment. A covered call is an options strategy where you sell call options against stock you already own. This generates premium income while potentially limiting upside if the stock price rises significantly above the strike price. It's a core component of the wheel strategy.
What is the best strike price for covered calls?
The “best” covered call strike depends on what you want: more premium now versus more room for the stock to run. At-the-money (or slightly out-of-the-money) usually pays more premium, while farther out-of-the-money reduces assignment chances. Comparing premium yield by strike helps you pick the trade-off you prefer. The best strike price depends on your goals. For maximum premium income, choose at-the-money or slightly out-of-the-money strikes. For lower risk of assignment, choose out-of-the-money strikes. Our screener shows premium yield at different strike prices to help you decide.
What happens if my covered call gets assigned?
If your covered call is assigned, your shares are sold at the strike price and you keep the option premium you collected. Your proceeds are the strike price times your share count, plus the premium. Many wheel traders then return to the first step by selling cash-secured puts to re-enter the position. If assigned, your stock will be sold at the strike price. You'll receive the strike price × number of shares, plus you keep the premium. You can then sell cash-secured puts to potentially repurchase the stock, continuing the wheel cycle.
How do I choose the right expiration date for covered calls?
Many wheel traders pick covered call expirations around 30–45 days to balance premium income with flexibility. Shorter expirations (like 7–14 days) can produce income more frequently but usually require more active management and decision-making. Filtering by DTE makes it easy to stay consistent with the timeframe you prefer. Most wheel strategy practitioners prefer 30-45 days to expiration (DTE) for covered calls. This balances premium income with flexibility. Shorter expirations (7-14 days) offer more frequent income but require more active management. Our screener lets you filter by DTE to find your preferred timeframe.
Cash-Secured Puts
What is a cash-secured put?
A cash-secured put is when you sell a put option while keeping enough cash to buy 100 shares at the strike price if you’re assigned. You collect premium up front, and assignment (if it happens) can let you buy the stock at an effective discount because the premium reduces your net cost basis. A cash-secured put involves selling put options while having enough cash to buy the underlying stock if assigned. This strategy generates premium income and potentially allows you to acquire stock at a discount (strike price minus premium received).
How much cash do I need for cash-secured puts?
For each cash-secured put contract, you need enough cash to buy 100 shares at the strike price. So a $50 strike put typically requires $5,000 reserved per contract. The key is to treat that capital as committed until expiration or until you close/roll the position; we show the required capital per trade. You need enough cash to purchase 100 shares at the strike price for each put contract sold. For example, if selling a $50 strike put, you need $5,000 per contract. Our screener shows the capital required for each opportunity.
What if my cash-secured put gets assigned?
If your cash-secured put is assigned, you buy the shares at the strike price and keep the premium you collected. From there, many traders move to the next wheel step: selling covered calls against the newly acquired stock to continue generating premium income while managing the position over time. If assigned, you'll purchase the stock at the strike price. You then transition to the covered call phase of the wheel strategy, selling calls against your newly acquired stock to continue generating premium income.
Using Our Screener
How does your options screener work?
Our options screener searches a large universe of contracts (570,000+), then applies your filters so you only see opportunities that match your rules. You can narrow results by factors like Delta, implied volatility, expiration, premium yield, and probability of profit. The goal is to quickly turn a broad market into a focused, risk-aligned shortlist. Our screener scans over 570,000 option contracts in real-time, applying your custom filters to find the best opportunities. You can filter by Delta, IV, expiration date, premium yield, probability of profit, and many other criteria to match your risk tolerance and investment goals.
What is premium yield and why is it important?
Premium yield is an annualized way to compare how much option premium you earn relative to the capital tied up in the trade. It’s calculated as (premium ÷ capital required) × (365 ÷ days to expiration), so you can compare different strikes and expirations on a consistent basis. Higher yield generally means more income per dollar invested. Premium yield is the annualized return you can expect from an options trade, calculated as (premium ÷ capital required) × (365 ÷ days to expiration). Higher premium yield means more income per dollar invested. Our screener automatically calculates this for every opportunity.
How do I use Delta in my screening?
Delta helps you balance premium versus assignment risk when screening options. Many income-focused traders look at Delta ranges like 0.30–0.70, while more conservative setups often use lower Delta (around 0.15–0.30) to reduce assignment odds and premium. Higher Delta behaves more like the stock and tends to carry higher assignment risk. Delta measures how much an option's price changes relative to the underlying stock. For income generation, many traders prefer Delta between 0.3-0.7. Lower Delta (0.15-0.30) is more conservative with less assignment risk. Higher Delta (0.7+) behaves more like stock ownership. Our screener lets you filter by Delta range.
What is probability of profit (POP) and why does it matter?
Probability of profit (POP) is an estimate of how likely an options trade is to be profitable by expiration. In general, higher POP implies lower risk (but often less premium), while lower POP can imply more risk. Many conservative traders look for POP in the 70–80%+ range; we show POP per contract. Probability of profit estimates the likelihood your options trade will be profitable at expiration. Higher POP means lower risk. Many conservative traders prefer POP above 70-80%. Our screener calculates POP for every opportunity to help you assess risk.
How often should I check for new opportunities?
Checking for opportunities daily is a practical baseline because premiums and market conditions change quickly. Option prices and yields can shift throughout the day, and setups can appear or disappear as volatility changes. To reduce manual work, save your screeners and use alerts/notifications when new matches appear. We recommend checking daily as market conditions change rapidly. Premiums fluctuate throughout the day, and new opportunities appear constantly. You can save your favorite screeners and get email notifications when new opportunities match your criteria.
Can I save my screener settings?
Yes—Pro members can save unlimited screener configurations with custom names, so you can reuse the same filter sets without rebuilding them each time. This is helpful if you run multiple playbooks (conservative vs aggressive, puts vs calls, different DTE ranges). Saved screeners are available across devices once synced. Yes! Pro members can save unlimited screener configurations with custom names. This lets you quickly access your favorite filters for different strategies, risk levels, or market conditions. Saved screeners sync across devices.
What is Delta and how do I use it?
Delta describes how sensitive an option’s price is to a $1 move in the underlying stock. For example, a 0.50 Delta implies the option price may move about $0.50 for a $1 stock move. Higher Delta behaves more like the stock and often means higher assignment risk; many income traders screen around 0.30–0.70. Delta measures how much an option's price changes relative to the underlying stock. A Delta of 0.50 means the option price moves $0.50 for every $1 move in the stock. Higher Delta means the option behaves more like the stock. For income generation, many traders prefer Delta between 0.3-0.7.
Options Trading Basics
What is implied volatility (IV) and why does it matter?
Implied volatility (IV) reflects the market’s expectation of future price movement, and it’s a major driver of option premium. Higher IV typically means higher premiums (often attractive for sellers) but also implies more uncertainty and risk. IV often rises before earnings and falls after; IV rank helps you compare today’s IV to history. Implied volatility represents the market's expectation of future price movement. Higher IV means higher option premiums (better for sellers), but also higher risk. IV typically increases before earnings and decreases after. Our screener shows IV rank to help you find the best premium opportunities.
What's the difference between bid and ask prices?
Bid is the price buyers are offering; ask is the price sellers are requesting. The gap between them (the spread) is effectively a transaction cost and often reflects liquidity. Tighter spreads usually mean better liquidity and easier fills. To improve execution, use limit orders and try to get filled between bid and ask when possible. The bid price is what buyers are willing to pay, while the ask price is what sellers are asking for. The spread between them represents the market maker's profit and your transaction cost. For better fills, aim to sell at the bid or buy at the ask, or use limit orders between the spread.
How do earnings affect options trading?
Earnings events often increase implied volatility, which raises option prices and can change risk quickly. The trade-off is higher premium versus higher uncertainty and a greater chance of large price moves. Many traders avoid holding certain positions through earnings unless it’s part of the plan. Knowing earnings dates helps you time entries and exits. Earnings announcements typically increase implied volatility, making options more expensive. Many traders avoid holding options through earnings due to increased uncertainty and potential for large price swings. Our screener can help you identify earnings dates to plan your trades accordingly.
How do I calculate potential returns?
A simple way to estimate return is premium received divided by capital required. For covered calls, that’s typically premium ÷ stock price; for cash-secured puts, premium ÷ strike price. Annualizing can help compare different expirations. Our screener and calculators compute these values automatically so you can compare opportunities consistently. Returns are calculated based on the premium received divided by the capital required. For covered calls, it's premium ÷ stock price. For cash-secured puts, it's premium ÷ strike price. Our calculator and screener automatically compute these metrics, including annualized returns.
What filters should I use for conservative trading?
For a conservative approach, filters typically emphasize lower assignment risk and higher consistency: low Delta (around 0.15–0.30), lower IV (e.g., IV rank below ~70%), longer expirations (often 30–45 DTE), and higher probability of profit (70%+). Pair those with liquid, established stocks and solid fundamentals to reduce surprises and improve fills. Conservative options traders typically prefer low Delta values (0.15–0.30), lower implied volatility (IV rank below 70%), longer expiration dates (30–45 days), higher probability of profit (70%+), and established, highly liquid stocks with strong fundamentals (reasonable P/E ratios, good market cap) to reduce risk and improve trade consistency.
What filters should I use for aggressive trading?
Aggressive filters typically chase more premium by accepting more risk: higher Delta (often 0.50–0.70), higher IV rank (e.g., above 50%), shorter expirations (around 7–21 DTE), and more volatile stocks. The trade-off is higher assignment risk and more frequent decision-making (managing losers, rolling, or taking assignment). Use these settings only if you can manage actively. Aggressive traders may target higher Delta (0.5-0.7), higher IV rank (above 50%), shorter expiration dates (7-21 days) for faster premium collection, and stocks with higher volatility. However, this increases assignment risk and requires more active management.
Risk & Strategy
Can I use this platform for day trading?
You can use the platform for day trading, but it’s built primarily for swing trading and longer-duration option selling workflows. The wheel strategy in particular tends to work best with longer timeframes (often 30–45 DTE) because it balances premium with transaction costs and reduces the need for constant adjustments. If you day trade, you’ll be using the tools differently than the intended wheel flow. While our platform is designed for swing trading and longer-term strategies like the wheel, you can use it for day trading. However, the wheel strategy typically works best with longer timeframes (30-45 days) to maximize premium income and reduce transaction costs.
How do I track my trades and performance?
Use the Trade Tracker to record trades, calculate P&L, and review performance across symbols and strategies. Tracking helps you see what’s working, where risk is concentrated, and how outcomes change over time—especially for multi-leg wheel workflows. You can monitor both realized results from closed trades and unrealized results on open positions. Use our Trade Tracker to log all your trades, calculate P&L, and analyze performance. This helps you identify which strategies work best, which stocks perform well, and optimize your approach over time. You can track both realized and unrealized gains.
What fundamental filters are available?
Fundamental filters help you avoid “premium traps” by focusing on company quality, not just yield. The screener includes filters such as P/E ratio, market cap, sector, and moving average crossovers so you can align trades with your investing criteria. Combining fundamentals with liquidity and options metrics helps reduce the risk of selling options on low-quality names. Our screener includes fundamental filters like P/E ratio, market cap, sector, and moving average crossovers. These help you find quality stocks that fit your investment criteria, reducing the risk of trading low-quality companies.
Platform Features
Do you offer mobile access?
Yes—the platform is mobile-friendly and designed to work well on phones and tablets. You can access core features like the screener, trade tracker, and watchlist on mobile without needing a separate app. For best results, use saved screeners and watchlists so you can review opportunities quickly on the go. Yes! Our platform is fully responsive and works great on mobile devices. You can access all features including the screener, trade tracker, and watchlist from your smartphone or tablet.
How accurate is your options data?
We use real-time options data from reliable sources and refresh it throughout the trading day. The dataset includes current prices, key Greeks (Delta, Gamma, Theta, Vega), implied volatility, and volume so you can evaluate trades with up-to-date inputs. Like any market data, it can change quickly—so treat scans as a starting point and confirm before executing. We use real-time options data from reliable sources, updated throughout the trading day. Our data includes current prices, Greeks (Delta, Gamma, Theta, Vega), implied volatility, and volume. We refresh data frequently to ensure accuracy.
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