EXAMPLE
Wheel (initial put)
Illustrative example
- Underlying
- $100.00
- Entry credit before fees
- $200
- Breakeven
- $93.01
- Max profit
- $199.35
- Max loss
- -$9,300.65
- Expires
- 2026-10-16
Premium strategy tool
Wheel Strategy Screener & Assignment Research
The wheel starts with a cash-secured put. If the put is assigned, you own shares and can sell covered calls against them; if the shares are called away, the cycle can restart.
TradingSignalAI's wheel tool evaluates the entry put and shows an indicative covered-call scenario. Later income is an estimate and not an assumption in the payoff chart.
Product preview
The chart below is the same payoff component used inside the platform, run on the hypothetical example described later on this page.
Wheel (initial put)
The wheel starts as a cash-secured put. This diagram shows only that first step.
Illustrative example
- Sell$95 put (first step)
Profit zoneLoss zoneStock priceBreakeven
- Example stock
- $100.00
- Entry credit before fees
- $200
- Breakeven
- $93.01
- Max profit
- $199.35
- Max loss
- -$9,300.65
- Evaluated at
- Expiration
Includes $0.65 entry commission per option contract. Exit, exercise/assignment fees and taxes are excluded.
Payoff scenario
Illustrative example, read-only. Hypothetical inputs run through TradingSignalAI's payoff model.
Illustrative example
- Hypothetical underlying
- $100.00
- Entry credit before fees
- $200 ($2.00/share)
- Position · standard 100-share contracts
- Initial leg: sell one $95 put
Expiration payoff
1 structure · 100 shares per option leg · expires 2026-10-16
Hover, touch, or focus the chart and use arrow keys to read P/L at a price.
- Shaded above $0: profit
- Shaded below $0: loss
- Solid line: P/L at expiration
- Dashed line: reference price
- Circle: break-even
- Dotted line: strike (values below)
- Break-even
- $93.01
- Strikes
- $95.00
- Payoff profit cap
- $199.35
- Max loss
- $9,300.65
The chart shows underlying prices from $81.01 to $112.00 only. Losses or gains outside this window can be larger; the window's lowest and highest points are not maximum risk.
Includes $0.65 entry commission per option contract. Exit, exercise/assignment fees and taxes are excluded.
Only the initial cash-secured put is shown. Future stock ownership and covered-call income are not assumed.
Move the pointer or focus the chart and use the left and right arrow keys to read profit or loss at each stock price. These are not live quotes or signals.
Metrics in pictures
Premium relative to capital
Cash-secured put example, hypothetical inputs.
Illustrative example
Premium
$310
Capital
$19,000
$190 strike x 100 collateral
Return
1.63%
13 days
Bar width = premium as a share of capital. $310 / $19,000 = 1.63%, or 0.126% per day over 13 days
Premium income only, before fees, taxes and any stock gain or loss. Per-day figures compare trades and do not promise the trade can be repeated.
Delta: directional exposure
Select a delta to see what it means for one call contract.
Illustrative example
Out of the money, delta 0.30
Moderate sensitivity. Sold options here collect more premium than at 0.15 and are more likely to finish in the money.
One standard contract has about 30 shares of price exposure: roughly $30.00 per small $1 stock move, or $0.30 per quoted share, with other inputs held constant.
Delta is a model sensitivity, not a probability forecast. Values shown are examples, not quotes.
How the wheel strategy tool works
- Candidates start from the same cash and collateral logic used for cash-secured puts.
- The tool also reports a hypothetical call strike and premium for the assigned-share scenario, where one is available.
- The payoff chart shows only the initial put. Share ownership and future call income are not assumed.
- Use the results to decide if you would own the stock at the breakeven before committing collateral.
Metrics you will see
| Metric | Meaning |
|---|---|
| Put premium | Credit received for the put, times 100. |
| Collateral | Put strike times 100. |
| Breakeven | Put strike minus premium. |
| Call scenario premium | Estimated call income if assigned. A forecast, not a commitment. |
| Days to expiration | Used to compare opportunities. |
Worked example: the first leg
Stock at $100. Sell a $95 put for $2.00 with 13 days to expiration.
| Item | Calculation |
|---|---|
| Premium | $2.00 x 100 = $200 |
| Collateral | $95 x 100 = $9,500 |
| Breakeven | $95 - $2.00 = $93.00 |
| If assigned | You own 100 shares with a $93.00 effective cost |
| Maximum put loss | Stock to $0: $200 - $9,500 = -$9,300 before fees |
If you then sell a covered call, its strike and premium depend on future prices. Calls at or below $93 can lock in a loss if exercised.
Risks to understand
- Assigned shares can fall below your breakeven for a long time, and covered calls only add a small premium.
- A call sold below your cost basis can cap the recovery.
- Capital is tied up in collateral or shares throughout the cycle.
- Repeated income estimates assume conditions that may not recur.
Access
Strategy tools are part of Premium. A Free account can record holdings and cash and browse universe research. Registration alone is not a Premium subscription.
Eligible new customers can begin a 7-day Premium trial. A payment method is required, and the selected plan bills automatically at the end of the trial unless canceled. Registration alone is not a Premium subscription.
Frequently asked questions
Learn more
- Cash-Secured Puts: Collateral & AssignmentCalculate put premium, cash collateral, expiration breakeven and downside exposure. Learn why premium income does not eliminate share ownership risk.
- Covered Calls: Premium, Breakeven & AssignmentLearn how covered calls work, calculate premium and stock-position payoff, and understand capped upside, stock downside and early assignment.
- Options Assignment: Share Delivery & RiskUnderstand exercise, early assignment, share delivery and expiration risk. Learn why covered positions and defined-risk spreads still need active review.
- Options Expiration, DTE & Return ComparisonsUnderstand days to expiration, exercise and assignment timing, and why normalized or annualized returns are comparisons rather than income promises.
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- Options Trading Signals & Strategy ResearchExplore 11 options strategy tools. Review strikes, expirations, premiums, liquidity and payoff scenarios before making your own trading decision.
Research the trade before you place it
Create a free account to record holdings and cash and browse universe research. Premium adds the strategy tools. Eligible new customers can start a 7-day Premium trial; a payment method is required and the plan bills automatically unless canceled. Registration alone is not a Premium subscription.