The Wheel strategy looks simple on paper: sell puts, take assignment, sell calls, and repeat. But experienced Wheel trader Paul Gundersen argues that successful execution requires much more, especially when it comes to stock selection, liquidity, and managing trades that move against you.
Here is a masterclass in the Wheel strategy, edited together from four Theta TRAINING sessions in June 2026. Over 3 1/2 hours, you get a comprehensive and in-depth introduction to one of the most popular options trading strategies.
Watch the full Wheel masterclass here
Paul Gundersen
Paul Gundersen began trading the Wheel in 2017 and has accumulated around 10,000 trades. His objective isn't to find one spectacular trade, but to build a repeatable process that can generate incremental profits over time.
Paul learned options trading from longtime friend and mentor Dale Perryman, who introduced him to the strategy after repeatedly encouraging him to take options seriously. Over the years, Paul developed his own systematic approach to the Wheel, combining fundamental stock selection with option-chain liquidity, disciplined trade execution, and active position management.
How the Wheel strategy works
Paul thinks about the Wheel much like owning rental property. The stock is the property, the option contract is the lease, and the premium collected is the “rent.”
But his Wheel strategy doesn't begin with selling an option. It begins with what he calls his SILTO list — Stocks I'd Like To Own.
Paul first asks whether the stock and its options are liquid enough to trade efficiently. Then he examines the company's fundamentals, including its sector and industry, revenue and earnings-per-share trends, and whether the shares can be purchased at a reasonable price.
That distinction is important: the goal isn't simply to find the stock offering the biggest option premium. It's to find a stock Paul is genuinely prepared to own.
Step 1: Sell a cash-secured put
At what Paul calls the top of the Wheel, he doesn't own the stock.
Instead, he sells a cash-secured put at a strike where he would be willing to buy 100 shares. The cash required to purchase those shares is held as collateral, while he collects the option premium.
If the stock remains above the strike at expiration, the put expires out of the money. Paul keeps the premium and can sell another put.
If the stock falls below the strike, he can be assigned 100 shares. Rather than regarding assignment as a failed trade, Paul sees it as the natural transition to the next part of the Wheel.
Step 2: Sell covered calls
Once assigned, Paul moves to the bottom of the Wheel.
Now he owns 100 shares and can sell a covered call against them, collecting another premium. If the stock moves above the call strike, the shares can be called away. He can then return to his SILTO list and begin another Wheel.
If the call expires out of the money, he still owns the shares and can sell another covered call. Paul sometimes stays in this part of the Wheel repeatedly, selling calls against the same stock.
For strike selection, Paul repeatedly demonstrates a preference around 20 delta. He also generally prefers weekly options when he has the time to manage them, because they give him more opportunities to collect premium and make adjustments.
Why liquidity matters so much in the Wheel strategy
One of the strongest themes of Paul's approach is liquidity.
He looks at stock volume, the depth and breadth of the option chain, and particularly the bid-ask spread. A liquid option chain makes it easier to enter and exit positions at reasonable prices—and gives the trader more alternatives when a position needs to be rolled.
This is why Paul doesn't believe every fundamentally attractive stock is necessarily a good Wheel candidate.
What happens when the trade goes wrong?
This is where the masterclass goes considerably beyond a basic explanation of the Wheel strategy.
Stocks fall. Sometimes they fall dramatically after assignment. Paul shows examples where this has happened to him and explains that his response depends on whether the original investment premise remains intact.
If he still considers the company fundamentally sound and remains bullish or neutral, he doesn't automatically take the loss simply because the share price has fallen. He may continue collecting covered-call premium and use rolling to adjust the position.
Paul describes rolling as adjusting an existing option position rather than simply exiting it. A contract can be rolled up or down to another strike, out to a later expiration, or both. In one discussion of an assigned stock that has fallen substantially, he says his typical response has been to roll down and out.
But there is an important condition behind this patience: the investment premise must remain valid. His willingness to stay with an underwater position comes from deliberately choosing stocks he was prepared to own in the first place.
A process built from 10,000 Wheel trades
Perhaps the biggest lesson from the Wheel strategy masterclass isn't any particular strike, delta, or expiration.
It's Paul's emphasis on having a repeatable process.
Build a list of stocks you genuinely want to own. Check liquidity before entering. Understand the fundamentals. Sell cash-secured puts at prices where you're comfortable owning the shares. If assigned, sell covered calls. And when the market moves against you, understand your rolling alternatives rather than reacting emotionally.
The masterclass follows real trades and shows how those positions evolve, while also covering assignment, option chains, trade tracking, and many of the practical “gotchas” Paul has encountered along the way.
After around 10,000 trades, Paul's central message remains remarkably simple: the Wheel is not just an options trade. It's a process designed to be repeated.
Finding liquid Wheel trades with ClearSense
Paul has also developed ClearSense, a software tool designed to support the research process he teaches in the masterclass. ClearSense helps Wheel traders quickly see where liquidity exists across option chains, making it easier to identify stocks with tradable options, attractive premiums, and opportunities for cash-secured puts and covered calls. Paul describes it as a companion tool for accelerating the research behind his SILTO — “Stocks I’d Like To Own” — process.
In the Wheel strategy masterclass, Paul demonstrates how he uses this type of at-a-glance liquidity analysis when evaluating potential Wheel candidates. Rather than manually searching through individual expirations and strikes, the objective is to quickly visualize where an option chain offers sufficient liquidity, thereby providing greater flexibility for entering, exiting, and rolling positions.
