Hey traders,
I’ve been talking a lot about my Triple Crown of income trading lately.
And that’s because I think a lot of traders get distracted with flashy strategies and rare triple digit gains.
When in reality real wealth is built consistently over time.
Of of the parts of the Triple Crown strategy is selling naked puts.
To a lot of folks, that sounds great: free money for making a promise. But then the though comes, “but what if I get assigned?”
They get worried that they’ll sell a put, the stock dips, and suddenly they’re holding shares they didn’t plan on owning.
But here’s the truth: assignment isn’t the end of the trade — it’s the start of the next one.
And if you’re afraid of assignment, you’re actually handicapping the whole strategy.
That’s like trying to roll down the road with half a wheel.
Look at this graphic I use to explain it… it’s a circle for a reason:
See how it works?
Sell Naked Puts → Tell You Own the Stock → Sell Covered Calls → Till You Don’t Own the Stock → (repeat).
That loop is what keeps the income flowing.
How I Run the Wheel
Step 1: Sell Naked Puts Until You Get Assigned
I only sell puts on stocks I’d be happy to own. This is where most people go wrong. They see HUGE premiums, but don’t realize the stock is a clunker.
The key is to start with STRONG stocks. If I collect premium week after week and never get assigned — great. The cash stacks up.
But if for some reason the stock dips, I get assigned.
Step 2: If Assigned, Own It — On Purpose
Assignment means I buy shares at the strike price of the put I sold in step 1. That lowers my effective cost basis. When that happens, I’m not upset — I planned for this.
Step 3: Sell Covered Calls Until You Get Called Away
Once I own the shares, I basically do the same thing in the opposite direction. Instead of selling puts promising to buy a stock at a certain price…
I sell calls promising to sell the stock at a certain price. That adds more income, keeps lowering my cost basis, and gives me a clean exit if the price rallies.
Step 4: Called Away? Perfect.
If my shares get called away, I’m back to not owning the stock.
Here’s another place people get scared: “But what if the stock rallies?! I have to sell it at the strike price I sold and I’ll miss out on a huge gain!”
Sure, that’s true.
But more often than not, it’s the exception rather than the rule. Look at any bullish stock. It never goes up in a straight line. If I told you, on average, how many times I had to sell a call before I got called away, you wouldn’t believe me.
And every time I sell a call, I’m bringing in more income.
So is this the end of the line? Heck no, once the shares get called away, I start back at the beginning, selling puts until I get assigned and going around and around the wheel.
Why This Works
The market’s job is to throw curveballs. The wheel’s job is to turn those curves into cash flow:
- Weekly/Monthly income – Depending on how far out you sell your options, you can collect income weekly or monthly — and from both sides (puts and calls).
- Lower your cost basis – As premiums stack up, your “effective” cost goes down
- Multiple ways to win – The stock can go up, down or sideways. As long as it doesn’t breach the strike price you sold, you keep the premium and continue on the wheel.
That’s exactly what I did recently on a name I got put.
My cost basis was higher than the current price, but I still sold calls above my entry and brought in hefty premiums.
That income cushioned the downside and gave me flexibility while I waited for the stock to recover.
Key point on “recovering” → Every stock is going to have a little turbulence now and then. Even the strongest stocks — look at NVDA. It’s at
The Takeaway
If you’re scared of assignment (or getting called away), you’re running a one-legged race. Half a wheel doesn’t roll.
When you sell puts the right way — on quality stocks, at smart strikes — assignment is not a failure. It’s the bridge to covered calls, which is the other half of the wheel.
Don’t see assignment as a problem. See it as the moment the wheel clicks into the next gear.
Keep the circle intact. Keep the income flowing.
Trade well,
Jack Carter
P.S. How to read Wall Street’s secret playbook in realtime. Right here.
