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What is the Wheel — and why has it become one of the most consistently profitable income strategies in the market? [tap to join us for Market Masters]
I’ve been thinking about what separates the way I trade from how many others approach this game.
It’s not discipline or risk management. It’s something deeper — what I can live with and what I can’t.
There’s a trader I know who’s perfectly comfortable selling naked puts and waiting. If the stock never gets put to him, he’s fine collecting the premium and moving on.
That’s not me.
If I sell a naked put and the stock rips higher without me, I’m unhappy.
Not because I missed the premium, but because I wasn’t long the stock when it moved.
I Want All 3 Profit Streams
When I find a setup I like, I don’t want just one angle. I want the Triple Crown: long stock, short puts and short calls.
I want to own shares, sell calls against part of the position and keep some shares uncapped in case the move really accelerates. I don’t want to get called out too early, even if that would still be profitable.
I’m also running a naked put alongside it.
Is it the most efficient strategy? Probably not. But it’s the one that lets me sleep at night.
Why I Need the Stock
Here’s a real example. I sold a naked put around $18, and the stock is now trading in the low $30s.
If all I had was that naked put, I’d be disappointed. I got paid, but I missed the move.
That’s why I prefer owning roughly 500 shares, selling calls on 300 of them and keeping 200 shares uncapped. I get paid on the calls, lower my cost basis and still keep upside exposure if the stock keeps running.
Some traders are fine watching a stock double after making a few hundred dollars on a put. I’m just not wired that way.
If I had the chance to own stock and watched it run to $32 without me, I’d be miserable.
So I don’t let that happen.
Trade well,
Jack Carter
Jack Carter Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. I’ll Reveal a Special Way to Play The IPO Rush
I believe that the “mega” IPO supercycle may be getting a bit overhyped, based on shocking market data.
Click below to reveal the details…
Plus, there’s an alternative approach to playing this frenzy that I want to share with you!
Source: Initial Public Offerings: Updated Statistics; University of Florida, 2025
