Options Wheel Strategy Calculator
Model the cash-secured-put → covered-call wheel: watch your cost basis shrink every cycle and see the true annualized yield.
Wheel Parameters
After assignment, premiums come from covered calls
Capital Required
—
Cost Basis After N Cycles
—
Annualized Yield
—
Total Premium Collected
—
Breakeven (put side)
—
Max Loss (to zero)
—
Frequently Asked Questions
What is the options wheel?
A three-stage income strategy: (1) sell cash-secured puts on a stock you like, (2) if assigned, own the shares at a reduced cost basis, (3) sell covered calls against them — then repeat.
What is the biggest risk?
The stock crashing far below your strike. Premiums cushion the fall but the wheel still carries full downside equity risk to zero.
Why does cost basis fall each cycle?
Every premium collected is cash in your pocket that effectively reduces what you paid. After enough cycles your basis can drop well below the original strike.
Does this work on any stock?
Best on stable, dividend-paying stocks you are happy to own. High-IV meme stocks pay fat premiums but assignment can be brutal.
Disclaimer: Options involve substantial risk. Educational model only — not financial advice. Consult a licensed advisor before trading options.