Is there any logic to using the premium of the wheel strategy to buy shares of said company, than for the CC if assigned go by your new avg with all the long time premium bought shares plus 100 new assigned. instead of setting a CC on the strike the put expired on?

  1. I would stick to the price of the new shares. You got them at the strike price and want to sell above cost base.

  2. I've had thoughts of this myself, but in the end I come up with I'm selling premium on a company I want to own... So in the end in accumulating a position while creating earnings through the wheel. You also have to take into consideration taxes on earnings if you're ok with the taxes paid on said premium out of pocket rock on if not withhold 30/40% for drawn down and taxes. When I finally have 100 shares I would roll CC's on those as well above whatever your average is to generate more capital for the next set of shares. Compounding is beautiful. Other option is spreads in my opinion.

  3. I was wondering this also, if when you do have 100 shares that you bought with premium, you plan on selling CC on it right? But than don't you risk losing all those shares you worked so hard to earn with premium? Or would you just do CC on ridiculously high prices to have close to no risk of assigning and if so, close position before getting assigned?

  4. If you think about this you are doubling down and locking in to a stock that may change over time. What if the stock you are trading drops from bad news or a change in their business?

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