Course · Act III: Theta Gang · Chapter 11
Cash-secured puts and the wheel strategy
Selling a put with the cash to buy the shares: the premium, the cost basis if assigned, how it differs from a naked put, and the wheel that turns assignments into covered calls.
Key terms
- Cash-secured put
- A short put with the full strike × 100 held in cash, so assignment is already paid for.
- Cost basis
- What a share really cost you. After a put assignment: the strike minus the premium kept.
- The wheel
- Sell a cash-secured put; if assigned, sell covered calls on the shares; if called away, start again.
“Cash-Secured Puts and the Wheel” is part of the full course: 6 puzzles on cash-secured puts and the wheel strategy. RocketCo is fictional, and none of this is a trade. Try this act’s free chapter, “Covered Calls”, first.
“Cash-Secured Puts and the Wheel” is in Act III: Theta Gang. 6 puzzles, unlimited retries.
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