Option trading · the wheel
I sell options on stocks I would be happy to own, mostly through the wheel strategy. This is how it works, what it does not do, and two free tools to practise with before you risk a dollar.
The strategy
It is called the wheel because it keeps turning. You pick a stock you actually want to own, then get paid for agreeing to buy it, and paid again for agreeing to sell it.
Stock selection matters more than the option mechanics. If you would not hold the stock through a hard drop, the wheel will hurt you.
Someone pays you for the right to sell you 100 shares at your strike. The premium is yours either way. Stock stays above the strike → keep it, go again
The stock closes below your strike, so you buy 100 shares at that price. Your real cost is lower, because you were paid upfront.
Now someone pays you for the right to buy those shares at a higher strike. Stock stays below the strike → keep it, sell another
The stock rises past your call strike and your shares are sold. You keep every premium along the way, and go back to step one.
What I actually do
I wheel on Interactive Brokers, alongside stocks I hold for the long term. TSLA and UNH have been my most consistent tickers for it.
It has not been smooth. Some assignments left me holding stock that then fell a long way, and in the 2025 correction I watched a large profit shrink to almost nothing before I rebuilt it.
What kept me steady was the premium. Every round I collected lowered my real cost on those positions, so the drawdown was smaller than the screen said. I am better off having wheeled than not.
The hard part is knowing the true number: premium, minus buybacks, minus assignment losses, plus or minus the stock underneath. Nothing off the shelf showed me that, so I built my own tracker.
Kevin Chia · how I trade
Both tools are free, need no login, and take less than ten minutes. The test asks whether the wheel suits you; the simulator shows you what it feels like.
Sell options on TSLA for three Fridays: a quiet week, an earnings week and the fallout. Black-Scholes pricing, $100,000 of paper money, real assignment mechanics.
Play the simulator → 20 questionsHow you handle losses, waiting and rules. You get one of seven trader types and an honest verdict on whether the wheel suits you. No trading knowledge needed.
Take the test → WritingWhat I learned from years of watching trading gurus, and the questions to ask before paying anyone to teach you.
Read it →Most of these I learned by breaking them.
If you would not be glad to own it at that strike after a bad week, don't sell the put. The premium is not worth a stock you never wanted.
Premium is richest right before earnings because the move can be huge. That is the week most people get hurt. The simulator puts you through one.
Gross premium sold is the screenshot number. Buybacks, rolls and assignments all come out of it. Net is what stayed in your account.
It cushions a drop; it does not prevent one. A stock heading to zero takes your premium with it.
Anyone can show a winning trade. Ask for the whole account, over a period that includes a correction, and judge yourself the same way.
What people ask before they sell their first put.
You sell a cash-secured put on a stock you would be happy to own. If it expires worthless you keep the premium and sell another. If you are assigned, you own 100 shares at the strike, and you then sell covered calls against them. If the shares are called away you are back to selling puts. Each turn collects premium and lowers your cost on the position.
No. It needs a decision every expiry, and it does not protect you from a stock that keeps falling. The premium cushions a drop; it does not stop one. It suits people who would buy the stock anyway and are happy to be paid while they wait.
One option contract covers 100 shares, so a cash-secured put needs the strike price times 100 in cash. A put at a $360 strike ties up $36,000 until it expires or you close it. That is why many people start with cheaper stocks, or practise first on paper.
Interactive Brokers (IBKR). It is open to retail investors in Singapore and most other countries and supports US options. If you open an account, you can use my referral link. IBKR may pay me a referral fee if you do, at no cost to you. It is what I use, not a recommendation that it suits you.
No. There is no course, no signal group and no paid community. The two tools on this page are free and need no login.
No. It is one person's account of what I do and what has gone wrong. Options can lose you more than you expect. Make your own decisions, or pay someone licensed to advise you.
Start small
Before you sell a real put, trade TSLA through a quiet week, an earnings week and the aftermath with $100,000 of paper money. It takes about five minutes.
Nothing here is financial advice, and I am not licensed to give it. Options carry real risk, including losing more than the premium you collect. The simulator is a teaching game with fixed prices, not a backtest. The Interactive Brokers links on this page are my referral link: IBKR may pay me a fee if you open an account through it.