Everyone Says the Wheel Is the Safest Strategy. Here Is the Catch Nobody Talks About

Options trading education: Tom Preston answers three viewer questions. When the VIX jumps from 15 to 20, do not wait for 30 because 30 may never come, and a 15 to 20 VIX jump gives you 30% more premium. On the 50% profit target, he built the P50 metric to fight the old Wall Street mantra of let your winners run, because as a trade approaches expiration it becomes a binary option and profits can vanish overnight. On the wheel strategy, the catch nobody talks about: if the stock crashes, no call on the board will protect you. Only run the wheel on stocks you actually want to own at the price where you get assigned. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 When the VIX is below 20, is it worth selling premium? 00:42 A 15 to 20 VIX gives you 30% more premium 01:06 Volatility trades in a range until the world changes 01:37 Use skew to decide where to sell 02:22 Below 15 VIX there is no clear edge in premium selling 03:15 The 50% profit target: when does it make sense? 03:33 The P50 metric: built to fight let your winners run 04:03 SpaceX example: 85% chance of making half max profit 05:01 Past the 50% mark it becomes a binary option 05:55 You do not go broke taking 50% profits 06:56 Would you put this trade back on? If not, take it off 07:43 Micron earnings: protecting gains vs hoping for more 08:15 The wheel strategy: what is the real catch? 09:00 The stock crashes and no call premium saves you 09:26 Short calls are not a hedge, tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.