Dan ties the wheel strategy to New Year’s resolutions, emphasizing that the wheel only works when it’s traded consistently and in cycles. He explains how to systematize the process so it fits into real life—reducing friction, minimizing time demands and making long-term wealth building sustainable.

• Why the wheel succeeds only as a cyclical strategy
• Commitment to process over individual trades
• Fitting the wheel into your daily or weekly schedule
• Stock selection and trade execution timing
• Managing expirations, assignments and recycling trades
• Minimizing adjustments and ongoing maintenance
• Using planning and automation to save time
• Systemizing the wheel for long-term results

• One-off trades don’t build wealth—cycles do. The power of the wheel comes from repeating the process consistently over time.
• Systemization is essential. A clear, repeatable routine makes the wheel sustainable and effective.
• The wheel must fit your life. When the strategy aligns with your schedule, it becomes manageable and even enjoyable.
• Time requirements are modest. With planning, most wheel maintenance takes minutes—not hours.
• Consistency beats intensity. A steady, methodical approach delivers better long-run results than sporadic effort.
• Make it a resolution worth keeping. This is the year to commit to a structured, cyclical investing process.

Learn more about host Dan Passarelli and Market Taker Mentoring: MarketTaker.com

Get exclusive content including video trade walk-throughs, Dan's actual trades, monthly AMA webinars and more: wealthbuildingpodcast.com

Subscribe on your preferred platform and leave a review to help more traders discover the show.

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.

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Dan puts implied volatility in its proper place: It’s not the single most important factor in wheel trading, but it meaningfully improves outcomes over time. Using a field-goal analogy, Dan explains how volatility analysis adds a “little edge” on each trade that compounds across many cycles. He then goes deeper into when volatility matters most, plus a practical framework for evaluating whether selling puts or calls into earnings creates a favorable “sweet spot.”

• Why implied volatility is not the most important thing—but still important
• The 1-2-3 volatility analysis for identifying overpriced options
• Active vs. passive wheel trading and volatility requirements
• The wheel hierarchy: price movement, theta decay, then volatility
• Risk premium and why options tend to be overpriced over time
• “When in doubt, palms out” and the premium-seller mindset
• Volatility regimes and how prolonged low IV changes decisions
• When extremely high IV is a warning sign, not an opportunity
• Why IV matters less for ultra-short DTE options
• Earnings as a volatility event: when to avoid vs. exploit
• Using break-even and indifference points to find the earnings “sweet spot”
• Using puts to enter or calls to exit around earnings

IV is an edge, not the core driver. Underlying price movement and theta are usually more influential in wheel outcomes, but IV adds incremental advantage that compounds over time.

Active and passive wheel traders use IV differently. Active traders may require confirmation that options are overpriced; passive traders may prioritize keeping the cycle going and capturing the long-run risk premium.

Humility matters in volatility forecasting. You can’t know with certainty whether options are mispriced until after expiration, so rules-based processes help reduce overconfidence.

Regime awareness beats day-to-day noise. A few low-IV days are normal; weeks or months of a pattern can justify sitting out or adjusting tactics, especially in strong rebound “freight train” markets.

Extremes cut both ways. Slightly high IV can be attractive for selling, but extremely high IV may signal risk you don’t understand.

Earnings setups can be evaluated objectively. Compare historical earnings gaps with the option’s break-even/indifference “sweet spot” to judge whether premium meaningfully compensates for the expected move.

If selling calls to exit stock into earnings, assignment probability matters. At-the-money or slightly in-the-money calls can improve assignment odds and provide more downside cushion, but the true advantage comes from time premium, not intrinsic value.

Learn more about host Dan Passarelli and Market Taker Mentoring: MarketTaker.com

Get exclusive content including video trade walk-throughs, Dan's actual trades, monthly AMA webinars and more: wealthbuildingpodcast.com

Subscribe on your preferred platform and leave a review to help more traders discover the show.

Next Episode Preview: Next time, Dan goes deeper into volatility analysis, expanding on how wheel traders can evaluate implied volatility, historical volatility, and upcoming catalysts to improve covered call and cash-secured put decisions.

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.

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Dan explains why wheel traders must think about technical analysis differently from momentum or breakout traders. Using a Home Depot analogy, Dan shows how the right tool for the job matters—especially when selecting indicators for skate-objective trades. He dives into oscillators (with a focus on RSI) and introduces a new strike-selection concept he’s developing.

• Why trends and momentum are often the enemy of wheel traders
• Using technical analysis to reduce trades per wheel cycle
• Choosing the right indicators for skate-objective trades
• Oscillators and how they differ from breakout indicators
• Deep dive into the Relative Strength Index (RSI)
• Overbought and oversold signals for covered calls and cash-secured puts
• RSI divergences and what they signal for wheel traders
• Introduction to the PAS (Price-history Anchored Strike) indicator
• Why wheel traders avoid “trendy” stocks
• Overview of volatility analysis as part of the options trader’s trifecta

Wheel traders don’t want momentum. Strong trends often force rolls, increase trade count and slow down wheel cycles.

Technical analysis should reduce activity, not increase it. The goal is fewer trades per cycle, not more signals.

Oscillators are better tools for wheel traders. Indicators like RSI help identify waning momentum rather than breakouts.

RSI can improve strike selection. Overbought and oversold reversals—and divergences—can increase the odds of skating successfully.

Indicators don’t predict the future. They provide a small statistical edge when used correctly.

Volatility matters as much as price. Understanding whether options are overpriced or underpriced is critical for consistent income strategies.

Learn more about host Dan Passarelli and Market Taker Mentoring: MarketTaker.com

Get exclusive content including video trade walk-throughs, Dan's actual trades, monthly AMA webinars and more: wealthbuildingpodcast.com

Subscribe on your preferred platform and leave a review to help more traders discover the show.

Next Episode Preview: Next time, Dan goes deeper into volatility analysis, expanding on how wheel traders can evaluate implied volatility, historical volatility, and upcoming catalysts to improve covered call and cash-secured put decisions.

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.

Trumpet Trumpet Fanfare by bevibeldesign -- https://freesound.org/s/350428/ -- License: Creative Commons 0

Wah Wah Wah

Wah wah trumpet failed joke punch line.wav by Doctor_Jekyll -- https://freesound.org/s/240195/ -- License: Attribution 4.0

Dramatic Drum Roll

dramatic drum roll.wav by ingsey101 -- https://freesound.org/s/51401/

-- License: Attribution 3.0