The wheel strategy they teach you is backwards.

wxytrader said:
No...this is a strategic trade. Probably not suited for directionally challenged. The idea is to collect the maximum premium possible by selecting the deepest itm strike that will finish OTM...everything else is just collateral damage.
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That is exactly a directional trade, you are betting on one direction. You are betting that your trade will finish OTM, and that is because you think it will go in that direction.

The wheel strategy is simple to understand, if you are doing anything else, then it is not the wheel, you can call it as you wish but it will not be the wheel.

There is one parameter that you need to understand to run the wheel, and that is what most people do not see. You have to start the wheel selling naked puts on an asset that you are confortable to hold. Then if you are assigned, you are happy becase you wanted to buy that asset in the first place.

If you start the wheel on a stock that you don't want to own you are doing it wrong.
 
Drawdown Addict said:
That is exactly a directional trade, you are betting on one direction. You are betting that your trade will finish OTM, and that is because you think it will go in that direction.

The wheel strategy is simple to understand, if you are doing anything else, then it is not the wheel, you can call it as you wish but it will not be the wheel.

There is one parameter that you need to understand to run the wheel, and that is what most people do not see. You have to start the wheel selling naked puts on an asset that you are confortable to hold. Then if you are assigned, you are happy becase you wanted to buy that asset in the first place.

If you start the wheel on a stock that you don't want to own you are doing it wrong.
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I could own actual garbage if I manage my risk by allocation size.
 
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