The Options Wheel Strategy is a systematic approach to options trading that involves selling put options to potentially buy stocks at a lower price and then selling call options on those stocks to generate income or sell them at a higher price. This cycle aims to collect premiums from both puts and calls, capitalizing on market volatility while managing risk. It’s particularly suited for neutral to slightly bullish markets, requiring a disciplined management of positions.
The strategy combines elements of both passive income through premium collection and active management based on market movements. Overall, the Options Wheel Strategy offers a methodical way to engage with the markets, providing consistent income opportunities for traders.