*updated 6/18/26**
Ok, here’s the thing. I have been investing in the stock market since I was 14 years old. So I have 30 years experience. I’ve made an ungodly amount from it. I’ve has some winners, I’ve had some losers. I’ve had some MASSIVE winners. From recently, I bought Nvidia years ago at $28, it’s over $200 now. I bought AMD at $55 years ago, it’s over $400 now. I bought Micron at $98 it’s almost $1000 right now. I worked in IT for years so I saw the writing on the wall. But full disclosure, I took come big L’s as well. BITO. The Dividend a year ago was WAY too much to pass up, over a 100% yield. But as Bitcoin crashed so did BITO. I had over 7,000 shares of it. I cut my losses on it back February and ate a $28,000 loss. Granted, it WILL rebound eventually. I could have held it for the next 3 years and turned a profit. But I don’t want to lock up $70k worth of capital for the next couple years to make maybe 5%
With that said, I do all sorts of trading. I do straight stocks. Been killing it with DRAM, MUU, and SMH lately. I do swing trades which I’ve made a bunch off Sofi just trailing the 9 day EMA and RSI. I got kicked in the nuts with Ford, only a $165 loss, but still, fuck you Ford, you’d been solid for 5 years. I do iron condors, I do credit spreads (usually on XSP with 2-4 day DTE At-The-Money. I do futures, I do ORB. Oddly enough OBR is the easiest of them all and the most profitable.
I do back testing, I do paper trading when I try a new strategy, and I found one, that seems to be pretty solid in every market. I started paper trading it 30 days ago, with 2 years of back testing, and I think I’m going to go live with it on Thursday
One of my biggest strategies I do is called The Wheel. It’s pretty simple.
The Wheel Strategy is an options income strategy that combines cash-secured puts and covered calls.
- Sell a cash-secured put on a stock you wouldn’t mind owning.
- You collect a premium upfront.
- If the stock stays above the strike price, the option expires worthless and you keep the premium.
- If assigned, you buy 100 shares of the stock at the strike price.
- Your effective cost basis is reduced by the premium you collected.
- Sell covered calls against your 100 shares.
- You collect additional premiums while holding the stock.
- If the stock stays below the call strike, you keep the shares and the premium.
- If your shares are called away, you sell the stock at the call strike price.
- You keep the stock profit (if any) plus all premiums collected.
- Repeat by selling another cash-secured put.
The goal is to generate consistent income from option premiums while potentially buying stocks at a discount and selling them at a profit. The main risk is a large drop in the stock price after assignment, which can create losses that exceed the premiums collected.
I do the wheel on stocks like Sofi, Ford (which burned me last week), Verizon, Coke, AT&T, and American Airlines, as well as a few others. I make about a 25% – 40% annual return on each, but the premiums are tiny. Sofi trades around $17 so if I sell weeklies, I only make about $15 from it. Granted that is nearly 1% a week and close to 50% a year. But I’m greedy lol.
Thursday I am going to start doing it in AMZN (Amazon) and IWM (Russell 2000) and have it go against SPY till the end of July
Now, this isn’t for the feint of heart, This will lock up about $90,000 of capital to try.
Every traders you talk to, their thing is “Can you beat the S&P”. If you talk to most, they will say it’s impossible. That you should just buy SPY or VOO and chill. Get your 7% a year and be happy. Fuck that. Those people are pussies. I’ve beat the S&P every year for 30 years. If you can’t beat the S&P you’re not stock trading, you’re gambling. Stupid shit like buying lottery ticket Call options that expire worthless.
What I’m going to do. So Amazon is trading at $245.81 share at this exact moment. On Thursday after FOMC comes out (The Fed Rates). I’m going to buy a cash secured put. Say it’s still trading at $245.81 I’ll buy a Cash secured put at a strike price of $242.50. I’ll get paid $53 for taking on that contract. It will lock up $24,250 in capital. If by the end of Thursday, the price of Amazon is over $242.50 my put will expire worthless. I’ll collect that $53, and my capital will of $24,250 will be released, and then on Monday when the market opens I can sell another one.
If by chance Amazon stock drops 2% that day and drops to $240.90, then I have to buy the shares at $242.50. Which means since each contract is 100 shares, I would be down $160. HOWEVER, I got that $53 premium from before, so I’d only be down $107. My cost basis would be $241.43 a share.
So now, the next day I sell a $242 covered call. That would get me about $120 from selling the contract.
If Amazon drops again down to say $240. OK I’m down. $143, BUT I just got $120 premium, so now my cost basis, is only $240.23 a share. I’m down $123. Amazon is not going to keep falling forever, it’s a blue chip. So Now the next day I sell a covered call at $241. I get about $135 in Premium. Stock rebounds, goes up to $242.
Now My shares get called away. Even though they are worth $242, I have to sell them at $241. So I lose $100 in upside.
However, I was down $123 going into the trade. I got $135 in premium. So now I’m up $8. Then my cost basis was $240.23 a share, I sold at $241.00 so I also collect $77 in the upside. So my total profit is $85. That’s a 0.03% return in 3 days. That ends up being a 35% return over the course of the year.
And that is if Amazon stock DROPS which it’s already under the 50 day EMA, and down 15% for the year, RSI is low and SUPER under sold, so odds are it’s going to be trending up for the next few month.
These examples have been if it loses money. I still destroy the S&P. It’s down for the last year, lets say it makes a rebound, which is VERY likely.
I’ll sell that cash secured put. It finished over $242.50. I collect the $53 for the day and move on. I do it the next day, get another $53 if it doesn’t drop. And so on and so on. A trend like that I would make over 120% return for the year.
But if one of the week it drops right below my strike, I sell the covered call, get the premium plus the profit between the underlying and the strike.
From my back tests, charts, and math, it will absolutely obliterate the S&P return.
Even if say the stock absolutely crashes, it drops 40% (not going to happen) but lets say it does. The stock drops to like $150. I can still sell the covered calls on it ever day, lowering my cost basis each day.
Now, I might be TOTALLY wrong. But I’ve done 5 years worth of back testing on this, and I don’t see any possible way this doesn’t at least double the S&P.
And for IWM it’s even better. It’s a 2000 stock weighted ETF, so you never have to worry about earnings announcements. The Russell only moves a max of like 1% to MAYBE 1.5% a day, so if you put your strikes 2% out. The chances are VERY slim to get assigned more than 3 or 4 times a year. IWM will lock up about $30,000 in capital
I am an absolute bull on this strategy.
Options traders always tell you “oh 30dte (days to expire) or 45dte is the sweet spot”. Fuck that noise. Premium on a 0 or 1DTE will be like $1 and a 30 day will be like $1.75. It goes against everything they say, but why the hell would I want to tie up the capital for a month to make less than double what I would in a day? It makes no goddamn sense.
Am I going to have losing days? SURE. But you can re-coop the loss in a day or two instead of sitting there for a month with your dick in your hands, and $90k in cash locked up.
Again, this goes against everything options traders and Guru’s teach you. So might I be wrong and be down $15 grand by the end of July? Maybe. But everything I have charted, tells me no. The “SPY and VOO and chill” people aim for that 7% a year sweet spot. To hell with that. I’m aiming for that in 45 days. I’m aiming for a 50% annual return minimum.
I’m not going to start it till Thursday afternoon selling all 0 and 1dte. So I’ll come here each day and update my Profit/loss and rate of return. SO lets see what happens
Update 6/18/26
First thing is I decided against Amazon, as I was reading through stuff to follow up on, there is a likely FTC lawsuit coming on July which is going to cost them billions. That is going to be a drag on the stock. So I rotated to Nvidia instead.
I also jumped the gun and started Wednesday before FOMC. I broke it into 3 accounts so they can go head to head.
Account #1: I put $30,000 into to use for The Russell 2000 [IWM]
Account #2: I put $22,000 into to use for Nvidia
Account #3: I put $38,000 into and bought 50 Shares of S&P 500 ETF Trust [SPY] at $751.28 per share. So $37,564 in capital used. It’s Thursday night, and the markets are closed until Monday now with the Juneteenth Holiday. So Lets see where we Stand
Account #1: IWM
The Stock was trading at $291.77 a share. So I started off with selling a Cash Secured put with June 17th expiration (0dte) for $56. The stock started to go up a bit, but this was Thursday so my put was going down in price (that’s what you want with a Case Secured Put, or Covered call, you actually want the price to do DOWN). After a few hours it was down to $5. So I rolled that up to the same expiration but to the $291 strike price. Which got me another $61. But Since I had to pay the $5 close and roll the profit there was $55. Bringing me up to a total of $101. I let that option expire worthless to collect max profit.
Because of the drops in stock prices after FOMC today (thursday) I figured I would change wheel directions. I bought 100 shares of IWM at $294.26 a share this morning, so that cost me $29,426.00. The first thing I did was sell a Covered call for the June 18th expiration at strike of $296 for $102. The The value of the stock itself started to drop quickly around 10am, to where that call only had a little value to it, $7 to be exact. But I had a feeling the stock would rebound quickly, but I didn’t want to roll it because the premium for higher strikes at the moment wasn’t worth it. So I bought the call back at $7 which locked in $95 profit. I then waited for the stock to rebound a bit, and then sold a $296 strike call for Monday for $97.
With all that going on, the stock itself right now it $294.71. So I’m up $71 there. I currently own the 100 shares, and have an out standing $97 call
So all told I am up $374 dollars there. From my initial $30,000 that is a return of 1.24% in just 2 days
Account #2: Nvidia
Yesterday started this off with a $205 cash secured put that I got $64 for. The stock started to go up fast, So when that was at $5 I rolled it up to a $207.50 strike for $59, but had to pay $5 to close the previous, so $54 profit. Then today I did the same thing I had done with IWM and switched directions. This morning I bought 100 shares at $208.72 so $20,872.00
I sold a covered call at strike of $210 expiring today for $55. The stock immediately started to drop after the morning opening gap (that’s normal). The Call was losing value, so I rolled it to the $207.50. Spent $5 to close the other, collected $39 on the new one. Stock was still dropping. I was up $27 on the call, but decided to buy it back for the $12 difference because all indicators were telling me Nvidia was going to Rally, which it did
I ended up selling the shares after it ran up for $210.81 a share. So I locked in $209 profit there. By then it was getting too late in the day to really start a new option wheel expiring today, So I sold a $207.50 strike price cash secured put for Monday expiration for $122.
So all told here on Nvidia I’m up $407 on a $22,000 investment, or 1.85%
Account #3: SPY
Not going to be any changing around details here, because I’ll I’m going to do is set it and forget it. I bought the 50 shares for $751.28 a share. At the close of market today they are now $746.87. On Thursday after FOMC it shit the bed and closed the day at $740.96 a share. So first day lost $10.32 a share. For a total of $516. Today it jumped up a bit. It closed $746.87. So I made $390.50 back. But still down
