The Income Wheel in crypto describes a systematic, cyclical options trading strategy aimed at generating recurring income, primarily through the disciplined selling of covered calls and cash-secured puts on a chosen underlying digital asset. Its objective is consistent premium collection, irrespective of minor asset price fluctuations.
Mechanism
This strategy typically initiates by selling an out-of-the-money cash-secured put option on a crypto asset; if assigned, the investor acquires the asset at a predetermined price. Subsequently, a covered call is sold against the acquired asset. If the call expires out-of-the-money, the premium is retained, and a new call is sold. If the call is assigned, the asset is sold, and the cycle restarts by selling another cash-secured put, systematically leveraging crypto options markets.
Methodology
The strategic framework for an Income Wheel prioritizes consistent yield generation over speculative capital appreciation. It demands disciplined options contract selection, precise strike price management, and scheduled expiration dates to optimize premium collection while managing asset price volatility. This methodology aims to systematically capitalize on time decay (theta) in crypto options, providing a structured approach to income generation in institutional options trading and smart trading environments.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
