📊 Wheel Strategy Update Review: $CLSK Cash Secured Put
$CLSK expired worthless, resulting in a 7.72% profit.
Hello everyone! 👋
As promised I’m providing an update on the first Options Wheel strategy play I introduced involving $CLSK.
Trade Recap: $CLSK Cash Secured Put
I sold a cash-secured put on $CLSK with a strike price of $15.50. The trade expired on July 26th, above my strike price, meaning I achieved the full profit potential of the trade.
Details of the Trade:
📈 Stock: $CLSK
🔒 Strike Price: $15.50
💰 Premium Collected: $111.00 per contract
💼 Collateral Used: $1,439 per contract
🗓️ Duration: 26 days
Outcome: Expired Wortthless
✅ Profit: $111.00 per contract
📊 Return on Collateral: 7.72% in 26 days
Breaking Down the Strategy
The Wheel strategy is a reliable method for generating consistent income. Here’s a brief overview of how this particular trade played out:
🛠️ Setting Up the Trade: I identified $CLSK as a suitable candidate due to its price action and volatility, which offered an attractive premium for selling puts.
🛒 Executing the Trade: By selling the cash secured put at a $15.50 strike price, I collected a premium of $111.00 per contract, requiring a collateral of $1,439.
📉 Managing the Trade: Throughout the 26 days, I monitored $CLSK’s price movements and market conditions, ensuring that the trade remained on track.
🏁 Expiring Above Strike Price: As $CLSK was above my strike price of $15.50 by expiration, I retained the full premium collected, translating to a 7.729% return on the collateral used.
My Take
I published this trade pre-market and my original goal was to collect $143.00 in premium for a 10.16% return, but the stock popped pre-market and I got filled at $1.11, however achieving a 7.7% return in just 26 days with minimal risk highlights the effectiveness of the Wheel strategy, particularly in generating income. This result reinforces the importance of selecting the right stocks, setting appropriate strike prices, and maintaining disciplined trade management.
I believe this trade underscores the potential of options selling to provide good returns with calculated risks. The key to success lies in meticulous research and sound technical analysis. As we move forward, I’ll continue to share similar opportunities and insights every Monday with a new wheel trade to help you maximize your trading success.
Thank you for following along with this update. Stay tuned for more trade reviews and strategies that can help you achieve your financial goals.
Feel free to share your thoughts and experiences in the comments below. Until next time, trade smart and stay confident! -ec
*Disclaimer The examples in The Options Oracle are my opinion and not financial advice.
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Many thanks Edward, sounds like a sound plan. As an old options Market Maker that has been out of the options market for a bit, very logical.
Hi Edward, have been quietly following your options trades. Just wondering how you’d manage this trade when it goes down and you might get the stock at the strike minus premium? Would you sell covered calls to lower the price more or sell a lower put if the analysis still points towards upward price movement?