# The Wheel

> Would you buy and hold this stock even without the option premium?

| Property | Value |
| --- | --- |
| Market phase | Range-bound, no trend, price oscillating between levels, Basing out, or a quiet upward drift |
| Driver | Theta - you get paid because time passes and premium decays, Delta - you get paid because price moves your way |
| Direction | neutral to bullish over the long run |
| Max profit | no single payoff - the sum of the credits plus or minus the price move |
| Max loss | full stock risk in phases 2 and 3, less every credit collected |
| Risk defined | Yes |
| Legs | Phase 1: cash-secured put; Phase 2 (after assignment): long stock; Phase 3: covered call; Phase 4 (after assignment): return to phase 1 |
| Approval level | 2 (Long calls and puts, cash-secured puts) |
| Experience | Beginner |

## Formulas

```text
Break-even: cost basis after assignment minus all credits
Max profit: no single payoff - the sum of the credits plus or minus the price move
Max loss: full stock risk in phases 2 and 3, less every credit collected
```

## Legs

1. Phase 1: cash-secured put
2. Phase 2 (after assignment): long stock
3. Phase 3: covered call
4. Phase 4 (after assignment): return to phase 1

[Read this strategy on the web](https://www.mindtrajour.com/en/academy/strategies/wheel)