Flashcard Set

Wheel Mechanics

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What are the three phases of the Wheel Strategy?

Answer

1) Sell cash-secured puts -- get paid to wait for a stock you want. 2) Get assigned and hold shares -- you now own the stock at a discount. 3) Sell covered calls -- get paid while waiting for the stock to recover or hit your target. When shares are called away, start over. This cycle is how I built my entire portfolio.

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