SELL TRADE WHEELS
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SELL TRADE WHEELS
The options wheel strategy is an income producing strategy involving selling put options, potentially owning stock, and selling covered calls until the shares are called away or the position is closed. The wheel is an increasingly popular strategy for investors that want to generate income before and possibly during stock ownership.
You can sell the short put at any strike price. Many investors use the short put as an income-generating, proxy limit order and will often sell options at a price they believe is a key technical support level.
If the stock is above the strike price at expiration, you can repeat the process for a later expiration date. If the stock trades down to $65 or lower, you may be assigned shares at $65. The premium collected on any put options reduces your cost basis.
I know Roboriders is only tangentially related to Bionicle, but I figured this forum would be my best bet at finding any for sale. Please PM me with any offers. For those interested in trading, I have three of the Axer mold (pictured above) and am willing to trade up to two of them for any golden wheels other than Toxic or Stunner.
Basically, you repeatedly sell cash-secured puts (CSP) to collect option premium. Should you ever get assigned you have to buy the stock at the agreed price. Then while holding the stock you sell covered calls (CC) on it to receive more premium. Once eventually your stock gets called away, you have to sell the shares and can start again going back to sell more cash-secured puts on the same or another stock.
The overall process starts selling a cash-secured put option on a stock and collecting the related premium. You should select stocks that you are confident to buy at a specific price, and eventually hold over the long term. For each option contract sold you need to be willing and have the funds available to purchase 100 shares of the stock at the agreed strike price.
First Possible OutcomeThe stock price is above the strike price. In this case, the option expires worthless and you simply keep 100% of the premium you previously collected when selling the option. Basically, you get paid a premium to be available to buy one of your favorite stocks at the agreed strike price at the option expiration date. You then move on and look for new puts to sell.
ExampleStock XYZ is trading at $100 and you sell one put option contract with a $95 strike price, 30DTE (days-to-expiration), and collecting a total premium of $300 ($3.00 x 100). After 30 days the stock is trading at $96, so above the strike price. In this event, the option expires worthless and you keep the full $300 premium. The trade was profitable even if the stock went down in price over the 30 days. The result will be the same if the stock at expiration is trading at any price higher than the strike price.
ExampleStock XYZ is trading at $100 and you sell one put option contract with a $95 strike price, 30DTE (days-to-expiration), and collecting a total premium of $300 ($3.00 x 100). After 30 days the stock is trading at $94, so below the strike price. In this event at expiration, you get assigned and have to buy 100 shares of the stock at the strike of $95 even if it has a current market price of $94.
Also in this case you keep the full $300 premium, and that allows to reduce the cost basis of the stock price. Despite you bought the stock at $95 (strike price) the additional premium of $3 per share (obtained selling the put option) allows reducing the overall cost basis to $92. So if you decide the sell the stock at the current price of $94 you will still end with a profit of $2 per share.
ExampleStock XYZ is trading at $100 and you sell one put option contract with a $95 strike price, 30DTE (days-to-expiration), and collecting a total premium of $300 ($3.00 x 100). After 30 days the stock is trading at $89, so below the strike price. In this event at expiration, you get assigned and have to buy 100 shares of the stock at the strike of $95 even if it has a current market price of $89. Also in this case you keep the full $300 premium, and that allows to reduce the cost basis of the stock price.
If you think the stock price is going to keep sinking you still can sell the shares and take the loss. In any case, the loss on the trade would be lower using the Wheel Strategy than if you had bought the stock at the original price of $100. At the very least the Wheel Strategy is an excellent methodology to reduce the overall cost of the stocks you like and are looking to buy anyway.
If you are assigned on a stock then you will look to sell an OTM (out-of-the-money) covered call with a strike price higher than its cost basis. If the stock that you now own goes higher in price but the covered call is not ITM (in-the-money) at expiration then you profit from the premium collected and capital gains over the entry price.
So while holding the stock shares you can generate a new source of income by selling covered calls multiple times for more premium, which will also lower the cost basis of the stock in case all these call options expire worthless. You keep doing it until the call option stock goes ITM before expiration, and eventually, the shares get called away from you.
Normally you want to avoid selling a covered call with a strike price lower than its cost basis, as that will bring a loss in the overall wheel trade. To ascertain that you need to keep track of all the premiums received plus the stock appreciation.
If you trade dividend stocks you might hold the shares long enough to capture also some dividends. For this reason, the Wheel Strategy can generate a quadruple source of income, as through the entire wheel cycle you should have collected option premium both selling cash-secured puts (before the stock was assigned) and covered calls (before the stock was called away), plus any dividends while holding the shares, plus potentially some capital gains on the stock price.
ExampleStock XYZ is trading at $100 and you sell a cash-secured put option contract with a $95 strike price collecting a total premium of $300 ($3.00 x 100). At expiration, the stock is trading at $96, so above the strike price. In this case, the option expires worthless and you keep the entire premium of $3.00 per share.
You then sell a new put option on the same XYZ stock with a $90 strike price collecting this time a premium of $2.00 per share. At expiration the stock is trading at $88, so below the strike price. You get assigned and have to buy 100 shares of the stock at the agreed price of $90 per share even if the stock is trading in the open market below that level.
After the assignment the stock keeps going down for a few weeks and while the price is at $84 you sell a covered call with a strike price of $87 collecting a premium of $2.00 per share. At expiration, the stock price is still $84 so the option expires worthless and you keep the premium of $2.00 per share.
You then sell a new covered call with a $86 strike price collecting this time a $3.00 per share premium. At expiration, the stock is trading at $87 so the shares are called away and you have to sell them at the agreed strike price of $86 even if the stock is trading in the open market at a higher price. Also in this case you keep the full premium.
In this example you got assigned on the stock at a price of $90, while the shares were called away at a price of $86, resulting in a net loss of $4.00 per share. On the other hand, the total amount of premium collected was able to offset the stock price depreciation, resulting in a net gain of $7.00 per share on the overall wheel trade.
You must be willing to own the underlying asset for the long term, as the power of the Wheel Strategy is in the time the options trader is willing to hold the stock or ETF like an investor until it gets back to the entry price.
We've all been there. You need to unlock the value of your current bike so you can find a bike for your next adventure. There are plenty of ways to sell your used bike. Some require more or less work than others, and some provide more value for your bike and your time.
If you're lucky, there might be a used sporting goods shop near you that'll buy used bikes. Many modern bike shops don't bother buying and selling used bikes anymore. Otherwise, one of the quickest ways to turn your used bike into cash is to find a local pawnshop. It is the old-fashioned way to turn most items into quick cash. If you're lucky, you may have a shop nearby that specializes in buying, selling, and consigning used sporting equipment.
The advantage here is the convenience of selling locally and completing a transaction the same day you walk in. The major concern, however, is getting maximum value for your bike. Many shops may lack the expertise to understand what your bike is worth, or their business model makes them unable or unwilling to give you the amount you want, especially for high-end bikes.
When selling online, be wary of scammers and bogus offers. Make sure transactions are safe and secure. Many police stations now offer special areas for such transactions to occur. This is also why I prefer Facebook Marketplace to Craigslist because you can scope the profiles of prospective buyers to see if they're legit.
Your ad also has to fight for attention, as it continuously gets bumped down by newer ads. If someone isn't searching for exactly what you're selling, they may never see it. If you're up for the work and personal interaction it takes, then it may be the way to go.
The Internet is rife with bike nerds and online forums are where they tend to gather. There are forums dedicated to every cycling discipline imaginable, from specific ideologies to brands to interests. Many cycling sites have specific buy and sell forums, which are slightly more educated versions of your local online marketplace. Still, visibility can be hit-or-miss depending on the site or bike, and you may run into low-ballers, potential scammers, or lack of views. 041b061a72