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3 Reasons Why You’d Lose Money Trading The Wheel Strategy
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This morning I woke up and my account was down $25,000 ($18K at the time of this video). This is on a margin account with $500K in buying power.
3 Mistakes:
1) Panicking and closing your positions at a loss.
2) Not having a plan.
3) Not having a tool that helps you make the right decisions. (PowerX Optimizer)
Solutions:
1) Don't Panic.
2) Don't close your positions.
3) Evaluate what's happening.
4) Follow your plan/strategy.
5) Have the right tool to make the best decisions
5 Positions in my account:
- AMD: if it stays above 83.50, I will make money = $576 in premium for the week
- DBX - Needs to stay above 21.50 I'll make $611 in premium.
- GDX (In Trouble): Last week I got assigned 2,100 shares at $48. I sold the 49 calls (21 contracts X $75) for $1,575 in premium.
- RIDE (In Trouble): If stays above 21.50, I'll collect the premium. It is unlikely it will probably get assigned 4,700 shares at $21.50. I sold 21.50 put s (47) and collected $1,974.
- AAPL (In Trouble): Got assigned 800 shares at $133.
Collected a total of $4,736 this week.
I am excited to get assigned. If you are not ok with getting assigned, you violated the number one rule of "The Wheel Club:"
"Don't Sell Puts On Stocks You Don't Want To Own"
After assignment, I will sell Calls and collect premium.
I will get assigned 4700 shares of RIDE at 21.50.
I will sell calls on Monday for about 0.43 and collect 2,021 in premium. (this is if RIDE opens on Monday around this price).
GDXJ: Got assigned at 47, and was assigned 2,100 shares. If GDXJ stays about where it is on Monday and can sell calls at 0.60, I'll collect $1,260 in premium.
With AAPL if I sell the 133 strike, I will get 0.13 making $134.
Recommended Links & Videos:
Trading with Margin: • Trading With Margin - ...
Options Trading 101: bit.ly/2V7Nf9T
The Options Wheel Strategy: • The Options Wheel Stra...
The PowerX Strategy Playlist: • The PowerX Strategy
#Options #SellingOptionsForIncome #StockMarket
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