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Wheel Strategy Tools

Wheel Strategy Calculator - CSP + Covered Call Cycle Return & Annualized Yield Tool

Wheel Strategy Calculator

Plug in your CSP strike & premium, the covered-call strike & premium you'd roll into, and instantly see the full-cycle premium income, your adjusted breakeven price, and the annualized yield — across both wheel outcomes.

✓ Free forever ✓ No signup ✓ 100% browser-side Live math as you type
Inputs
Market Price
$
PHASE 1 Cash-Secured Put
CSP #1
$
$
days
PHASE 2 Covered Call
CC #1
$
$
days
Live Results
1 CSP only - expires worthless
+$180
1.89% on capital · 23.0% annualized
2 Full cycle - premium income (called away)
+$340
3.58% on capital · 60 days · 21.8% annualized
+ $500 stock appreciation above $95 (separate capital gain, not wheel income)
Adjusted Breakeven Price
$91.60
Strike $95.00 - CSP $1.80 - CC $1.60 = $91.60/share. Sell at or above this and you lock in profit after both premiums.

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The 3 Phases of the Wheel Strategy

The wheel rotates through three repeatable phases. Each cycle, you collect premium from at least one leg and ideally capture a small capital gain when shares are called away.

1

Sell Cash-Secured Puts

Pick a strike below the current price you're willing to own shares at. Collect premium up front. If the put expires worthless, you keep the full premium and start over.

2

Get Assigned → Sell Covered Calls

If the stock dips below your strike at expiration, you buy 100 shares per contract at the strike. Immediately sell a covered call at or above your adjusted breakeven price to start recouping.

3

Get Called Away → Restart

If the stock closes above your covered-call strike at expiration, your shares are sold at the strike. You keep both premiums plus the (strike - put strike) capital gain. Wheel restarts at Phase 1.

Every wheel cycle breaks down into a few simple formulas. The calculator above applies these in real time.

Scenario 1 - CSP expires worthless

CSP income = CSP premium × 100 CSP return = CSP premium / CSP strike Annualized = CSP return × (365 / DTE)

Scenario 2 - Full cycle (premium income only)

Cycle P&L = (CSP premium + CC premium) × 100 Capital used = CSP strike × 100 Cycle return = Cycle P&L / Capital used Cycle days = CSP DTE + CC DTE Annualized = Cycle return × (365 / Cycle days)

The wheel's return is the premium collected across both legs. When shares are called away at the CC strike, any appreciation above your CSP strike is a separate capital gain on the share sale - it's real cash, but it's taxed as a capital gain (different from option premium income) and it isn't what makes the wheel work. A wheel trader who picks CC strikes at or below their CSP strike will realize zero capital gain when called away and still collect full premium - that's the purest form of the wheel.

Adjusted Breakeven Price

Adjusted Breakeven = CSP strike - CSP premium - CC premium

The Adjusted Breakeven Price is the share price at which you'd lock in zero net profit on the share position after accounting for both premiums already collected. Sell at or above this and the cycle is profitable; sell below it and you're realizing a loss even after the premium cushion. (For the premium-only wheel purist, sell the CC at or below this breakeven so the called-away exit is a wash on the shares and your only profit is the premium.)

How do you calculate wheel strategy returns?

The wheel's return is the premium collected across both legs. For a $95P @ $1.80 → $100C @ $1.60 (both 30 DTE), full-cycle premium income = ($1.80 + $1.60) × 100 = $340 on $9,500 of capital = 3.58% per 60-day cycle, ~21.8% annualized. If the put expires worthless, you only keep the CSP premium - $180 on $9,500 = 1.89% per 30-day cycle, ~23% annualized. Note: if your CC strike is above your CSP strike and shares get called away, you also realize a capital gain on the stock appreciation - that's a separate taxable capital gain, not part of wheel income.

What is a good annualized return for the wheel strategy?

Realistic wheel returns are 15–30% annualized on deployed capital in normal markets, selling 30-delta puts and calls 30–45 days out on liquid, stable stocks. The premium yield is what you count as wheel income; any stock appreciation when called away is a separate capital gain. Quoted premium yields above 40–50% annualized usually mean elevated IV and real drawdown risk, not free income.

What happens when you get assigned on the wheel?

Your reserved cash buys 100 shares per contract at the put strike, and your effective adjusted breakeven price becomes strike − every premium collected. You then sell covered calls against the shares — ideally at or above your breakeven — collecting more premium until the shares are called away, which completes the cycle.

How do you track your breakeven price on the wheel strategy?

Adjusted Breakeven Price = put strike − every premium collected. Start with $95, subtract $1.80 (CSP) and $1.60 (CC) → $91.60. This is the lowest call strike you can sell without locking in a loss if called away. Note that for tax reporting, brokers treat each leg separately — the adjusted cost basis for tax is what appears on your 1099; the breakeven price is a trading metric.

Is the wheel profitable if the stock keeps falling?

The wheel loses money when the stock drops faster than premiums accumulate. If shares fall far below your basis, covered calls near your basis will expire worthless for several cycles while you wait for a recovery. The losses are capped at the unrealized drop (because you own the shares), but cycle dollar returns shrink to zero. Picking stable, fundamentally sound tickers and avoiding earnings dates is the main defense.

Is this calculator free? Do I need to sign up?

Yes - the OptionSpeed Wheel Strategy Calculator is 100% free and runs entirely in your browser. No account, no email, no payment. All inputs and math stay on your device.