Lesson 5 of 5

Completing the Wheel

The Full Cycle: Putting It All Together

When your covered call is assigned and shares are called away, the wheel has completed one full rotation. You now have cash from the share sale plus all the premiums you collected. No stock position. This is when you decide: start the wheel again on the same stock, or find a better candidate? I usually run the same wheel unless something has changed with the company.

A Complete Wheel Example on AMD

Full Wheel Cycle -- AMD

Week 1: AMD at $145. Sell $140 put (30 DTE) for $2.80. Collected: $280. Week 5: AMD drops to $138. Assigned at $140. Cost basis: $140 - $2.80 = $137.20. Week 6: AMD at $138. Sell $145 covered call (30 DTE) for $2.10. Collected: $210. Week 10: AMD rallies to $147. Shares called away at $145. Profit on shares: ($145 - $137.20) x 100 = $780 Call premium: $210 Total: $990 in 10 weeks on $14,000 capital. That's 7.1% in 2.5 months, or about 34% annualized. No magic. No insider info. Just selling puts and calls on a stock I believed in.

Tracking Your Wheel Performance

Track total premium collected per ticker across all cycles. This number only goes up.
Monitor your rolling cost basis: original cost minus all premiums received. This number only goes down.
Calculate annualized return: (Total Return / Capital Deployed) x (365 / Days in Trade). This is how you measure if the wheel is beating buy-and-hold.
Log every trade: entry date, strike, DTE, premium, close date, outcome. I use a spreadsheet. Nothing fancy.
Compare against buy-and-hold. If the wheel isn't outperforming, you might be picking the wrong stocks or strikes.

When to Stop the Wheel

The wheel is not 'set and forget.' You need to re-evaluate regularly. I check my positions weekly and my overall thesis monthly. Here are the reasons I stop wheeling a stock:

Fundamentals have deteriorated: earnings miss, guidance cut, management change, competitive threat. If the bull case is broken, get out.
IV has collapsed: If IV Rank drops below 20 and stays there, premiums are too thin to justify the capital. Park that money somewhere better.
The stock has run up too much: If it's up 40% and you wouldn't buy it at the current price, don't sell puts on it. Re-evaluate.
You're overconcentrated: If 50%+ of your account is in one ticker, that's not a wheel portfolio -- it's a concentrated bet. Diversify.
A better opportunity exists: Capital is limited. If PLTR offers 3% monthly yield and your current wheel only offers 1%, consider rotating.

Building a Wheel Portfolio

I run 3-5 wheels at a time across different sectors. Right now that might look like: AAPL (tech), SOFI (fintech), AMD (semiconductors), BAC (banking). This way, a tech selloff doesn't nuke my entire portfolio. Each position generates its own income stream. The combined premium adds up fast.

The wheel is a marathon, not a sprint. Consistency matters more than any single trade. I started with $6K and built to $231K by doing the same thing over and over: selling puts, getting assigned when it happened, selling calls, and repeating. Some months I made 5%. Some months I made 1%. One bad month I lost 3%. But over time, the premium accumulation is what made it work. Stay disciplined, stay patient, and let the wheel turn.

The short version

•One complete wheel cycle = sell puts, get assigned, sell calls, shares called away. Then repeat.
•Track every trade. Know your rolling cost basis and annualized return at all times.
•Stop wheeling a stock if fundamentals break, IV collapses, or better candidates appear.
•Diversify across 3-5 tickers and sectors. The wheel works best as a portfolio strategy.
•Consistency and patience beat chasing big wins. Premium accumulation over many cycles is the real edge.

Quick Check

1/3

After your covered call is assigned and shares are called away, what phase of the wheel do you return to?

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