A Simple Way to Generate Income for Beginner

A friend sent me a screenshot of the WHEEL strategy yesterday. It reminds me to share this in blog.

Funny thing is, I had already thought of this approach on my own before realizing it was actually a real, practical strategy. I only found out its name and how it’s used after reading about it in a training material on the Moomoo app.

Today, I want to share what I’ve learned about the WHEEL strategy. The WHEEL strategy is a systematic options approach that involves two key actions:

Step-by-Step: How It Works

Step 1: Sell a Cash-Secured Put

I begin by choosing a stock I wouldn’t mind owning 100 shares of. Then I sell a put option at a strike price I’m comfortable buying at. I keep the premium upfront. For example, I sell 1 put option contract for Google for 2 months at strike price USD150.

If the stock price stays above the strike price by expiration, I keep the premium and repeat.

If the price drops below the strike, I buy 100 shares at the strike price (which I planned for).

NOTE: secured put means you need to own the money to buy the 100 shares in case the price dropped to the target price you set.

Step 2: Sell a Covered Call

Now that I own 100 shares bought at the very low price from Step 1, I sell a covered call at a higher strike price, i.e USD 200.

If the stock rises above the strike price, my shares are sold, and I keep the profit + premium.

If not, I still own the shares and can repeat the process of selling more calls for income.

And once the shares are sold, I go back to step 1: sell puts again. That’s why it’s called the “WHEEL” — it keeps turning.

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Why I Like This Strategy

• Simple to understand for non-professionals
• Generates consistent premium income
• Lets me accumulate stocks at discounted prices

Things to Keep in Mind

• Choose high-quality stocks you don’t mind holding
• Ensure you have enough capital to buy 100 shares if assigned

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I’m currently trying to use this method in my own investing journey. It allows me to stay active in the market, collect income, and potentially accumulate stocks I believe in — all while following a simple, repeatable system.

At this stage, I am still collecting premium while waiting for the share price to drop to my target.

Have you tried the WHEEL strategy before? Let me know your experience or thoughts in the comments!

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