Wheel Strategy Tips - How to "Fly Rescue Missions"

Wheel Strategy Tips - How to "fly rescue missions" - Coffee With Markus | Episode 143

You might have heard me talking about "rescue missions" when a Wheel Strategy Trade is in trouble.

In this video, I will show you exactly what that means and also talk about more wheel strategy tips, e.g. trading the wheel option strategy, trading the wheel in a down market, and several the wheel option strategy example.

Here's the agenda:

Intro: 0:00
Wheel Strategy Overview: 2:33
What Are Rescue Missions?: 4:45
How Do You Fly A Rescue Mission?: 8:57
When Should You Fly A Rescue Mission?: 11:35
Important Rules: 23:25
Deep Dive Q&A: 33:55

The Wheel Strategy Overview:
1) Sell Put options and collect premium
2) You may or may not get assigned
3) when you are assigned, you sell calls and collect more premium.

- Problem
* What if you can't get enough premium for the calls? (at least 30% annualized)
* Don't sell below the assigned strike price.

Rescue Missions:
- You sell more put options below the assigned strike price
- Advantage:
* You collect more premium
* If you are getting assigned,
* you lower your cost basis
- Easier to get out of the trade

RIDE example:
- Got assigned at 21.50, currently trading at 16.23 (100 shares)
- The idea is to sell strike price at 11.50 put, collect more premium.
- If assigned, we would own 100 more shares at 11.50.
- This would bring the average per share down from the initial 21.50/share to 16.50/share, lowering our dollar cost basis making it easier to get out of the trade.

How Do You Fly A Rescue Mission?
- Sell Put below the assigned strike
- Same amount or more
- Follow the Wheel Calculator
* I want to make at least 30% annualized

When Should You Fly A Rescue Mission?
- Only if you can’t get enough premium for the calls
- WAIT!!!
* Don’t fly rescue missions too early!
* You need to keep your powder dry (MARGIN)
- Only consider this if the stocks went down at least 30% from your assigned price

Examples:
AAPL: down 12% -- NO rescue mission
GDXJ: down 9% -- NO rescue mission
RIDE: down 24% -- NO rescue mission yet
* We can start thinking about it

IMPORTANT:
You can’t rescue every trade!

5 Stocks NOT to sell puts on when trading The Wheel:
- “Reddit Stocks”: GME, AMC, BB, BBBY, SLV
- Stocks with earnings before expiration
- Stocks with Phase 3 clinical trial (SRPT)
- Crazy stocks
- Stocks with premiums that are too good to be true
* Stocks above
* Leveraged ETFs (2x, 3x, …)

Summary
- Yes, you can fly rescue missions
- Don’t trade “stupid stocks” (see above)
- Have a plan BEFORE you sell puts
* Where’s the next support level
* Rescue Mission
- Don’t panic
- Don’t start flying rescue missions too early
Recommended Links & Videos:
How To Find The Best Stocks For The Wheel (Last Video): https://youtu.be/nHkZNLR2P2Y
The Wheel Strategy Playlist: https://youtube.com/playlist?list=PLBa3sAx-Io2nosgosERUhIZwzvIgD-3Vq
How to find strong support and resistance: https://www.youtube.com/watch?v=ZkEOuWW5GVc
Wheel Book Waitlist: https://www.rockwelltrading.com/wheelbook
Rockwell Merchandise: https://store.rockwelltrading.com/

#StockMarket #OptionsTrading
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Видео Wheel Strategy Tips - How to "Fly Rescue Missions" канала Markus Heitkoetter