The Proprietary Safe Wheel Strategy (Tues. 01/18/22)

Good morning and welcome to my real time options trading, where I trade a real account with real money right in front of you.  Now I’m totally transparent as I share my account value live on screen, and I’ve been trading options online for 28 years now.  And I’m here to share how it’s possible to trade options with less risk and how you can even follow my trades if you choose to do so.

I must say that trading is risky and it is possible to lose money following my trades.  My purpose is to help people learn how to trade a proprietary trade I developed called the Safe Wheel Strategy.  The wheel strategy, as it’s known today, is a popular strategy but it comes with major risks, and I’m here to help people learn a wheel strategy that does not carry all the normal risks.  Now, I’ve seen people follow the old school wheel strategy that many Youtubers tout only to end up becoming frustrated and lose money.  

If you’re interested in a conservative effective approach to trading options for free, you’re in the right place.  If you’re interested in the back-test results of the proprietary Safe Wheel Strategy that I developed, I’ve made a video on that and I left a link in the description.

Okay, let’s get started here.  Well, we know we’re dealing with Macy’s as far as the wheel strategy, The Safe Wheel Strategy, and we can see that we’re holding long puts.  We’re holding our put hedge here.  And we sold our $25 strike put last week.  And Macy’s remained above $25 so we did not get assigned.  So therefore we’re just we’re just kind of a little bit of a clean start.  

We still have our hedge in place and we’re going to keep our hedge in place.  And we’re just going to go ahead and do what we did last week.  We’re going to sell a put.  We’re going to start this whole wheel thing over and collect some more premium.  

So the first thing I’m going to do is go to the trade tab.  I did have a couple requests to show the analyze tab, so this is what it looks like.  And I can show that after I put on the position.  

So I’m going to go into the closest to expiration, the one that expires this Friday, and I’m going to take a look at which put do I want to sell.  Typically I want to get–if I’m trading around $25, I want to get at least $0.25 or more.  So the $24.50 is not really going to get me what I want because that’s only going to be $0.22.  So it needs to be at least, you know, $0.25 or $0.26.  

So I’m going to sell the $25 again.  So I’m going to go ahead and hit sell.  I’m going to sell one.  Okay, so the account’s a $5,000 account.  So I’m going to use one contract here, and I’ve got three of the long put hedges.  

You can see my P&L.  I’m not going to hide my P&L.  I’m going to show my P&L.  I think that’s the difference between here and pretty much everywhere else that you go.  Okay, so the goal here is–mid price is .35–the goal here is to get as much premium as possible. 

Let’s start at .38, and I’ll just work it down.  Okay, looks like I got filled there at .36.  Okay, so now we have the beginning of our wheel.  Now one more thing, because we have this long put hedge, we want to protect that and so I’m going to go ahead and buy, in the same expiration, cycle the cheap little $0.05 or $0.06 long call.  I’m just going to buy one of those so it’s going to cost $5 or $6.

Okay, so now we have our position on for this week.  We’ll see what happens at the end of the week on Friday.  Macy’s might go below $25 and we’ll own shares or it won’t and we’ll just keep this premium.  And here’s the analyze tab.  So that’s what it looks like here.  We’re trading right about here.  Okay, I don’t really pay attention to the analyze tab when it comes to this–when it comes to this trade– but you can see we’re up $76, $75.  

Now, if anyone wants to ask any questions you can go ahead and post that in the chat and I’ll respond to that.  Let’s see if there’s any questions here.  Okay, while we’re waiting; I don’t see any questions, make sure to subscribe to my Earnings Edge Alert.  So far, I’ve made two trades.  One trade was–I’m going to say– a loss at a normal, you know, at the rate that I expected around $300.  And then the second trade almost at a break even; down about $100 so.  Basically, one loss, one basic break even, and that’s how that particular alert service is going.  

And I definitely will share my P&L with that alert service so you’re going to get the real deal.  You’re not going to get, you know, some type of polished–I’m not polished–you know, you’re going to get the real numbers with me.

Okay, well I don’t see any questions.  Oh, here’s a couple questions here.

So John: do you think this strategy would scale up?  Absolutely, this strategy would scale up so if I was dealing with $50,000 instead of $5,000, you know, I’d be up $740 basically.  Yes, this will scale up.

Alan: he is not going to show his live P&L ever again all his future videos as usual won’t show overall P&Live.  I don’t know who you’re talking about.  You’re not talking about me because there’s my P&L right there.

Okay, Das Katzen: if assigned, do you sell calls until assigned on the calls?  Yes, I will sell calls until I am called away from my position.  And then I’ll start over again.  I’ll actually get rid of the put hedges at that time and just start the whole thing over.  And by the way, I don’t know, I don’t think that they’ve honored my margin.  So if I ever have to settle out of a position, I’m gonna have to wait till the next day to go ahead and put it on, you know, that’s kind of a negative; but it’s actually kind of a positive too because if you don’t have margin, you can actually play, you know, you can follow my trades without using margin.

And I got another guy saying: “what’s up kool Karl,” from The Shovel.  What’s up, the shovel.

Okay, well if there’s no more questions I’m gonna go ahead and end the broadcast here, and we’ll see you guys next week, all right.

Oh wait, here we go.  One more but right before I was getting ready to leave.  Here let’s see, Iamtheonewhoknocks, okay: can you make an options playlist for beginners?  I think you mean a beginner’s course?  And I do have a beginner’s course.  Go to my website there and you just opt. in with your email and there’s a it’s about six or seven videos of options for beginners.  And my; it’s real-P&L, real-P&L, is my website.  

[From alan thayer]:  In all of your other videos you don’t show the overall P&L.  Oh, sure I do.  Every month I show the P&L and I actually show the P&L volatility.  So you can see my P&L every single day for the whole month.  So I’ll go in for example in January, and you’ll see my whole P&L for every day in December so you’ll see that. 

[From das katzen]:  do you keep the short put hedge on or reset that all over again as well?  So I’ll reset that whole put hedge after I get called away out of my stock.

Okay, well I’ve got this other guy telling me that I don’t show my P&L which, you know, you need to go to my videos and you can see it; and there’s my P&L right there.  So, I don’t know what you’re talking about.  I’m not going to keep defending myself here.

Okay, well this is the end of the broadcast and we’ll see you guys in about a week.


Link to my Earnings Edge Alert Service

Link to My Safe Wheel back tests GO TO 6:55

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