Problem with the wheel strategy is that you use cash secured puts to get inside the position and if it goes wrong (bellow) enough and then to generate enough premium you sell covered calls below the incoming stock price of your entering on the put, and you get a assigned you lose (capital) on that trade more then premium you generated
All of investing is a gamble if you think about it. Nobody is sure what the future holds. That being said, when you sell options, the odds are in your favor. Buying options is a better example of gambling. The market has to go up if you buy calls to be profitable and it has to go up significantly. When you sell covered calls, if the market goes down, stays flat or even goes up a little bit you WIN.
Problem with the wheel strategy is that you use cash secured puts to get inside the position and if it goes wrong (bellow) enough and then to generate enough premium you sell covered calls below the incoming stock price of your entering on the put, and you get a assigned you lose (capital) on that trade more then premium you generated
I am broke and only starting my investing dream. Is there a way to do options with 100 dollars or less?
Sounds like gambling.
All of investing is a gamble if you think about it. Nobody is sure what the future holds. That being said, when you sell options, the odds are in your favor. Buying options is a better example of gambling. The market has to go up if you buy calls to be profitable and it has to go up significantly. When you sell covered calls, if the market goes down, stays flat or even goes up a little bit you WIN.