In this video, I'm going to show you a

new strategy that I'm running that I'm

going to call the wheel 2.0. I'm going

to show you three total option selling

strategies in this video. And this is

going to focus on my consistent and

stable approach that I use for option

selling. And you're going to see how I

adapt the wheel strategy and use spreads

with the wheel strategy. All right, now

that you know the theory, let's get into

a little bit more of the specifics of

how I'm running three different

strategies within my option selling

portfolio. So, first of all, we're going

to start off with the top level, which

is just essentially selling put options.

Okay, we can see here in this picture

that I have selling put options, selling

call options, and that's essentially the

wheel strategy, which I've discussed

many times on this channel. If you're

subscribed, here's a brief overview of

what the wheel is. We sell cash secured

puts. We get paid to basically name our

price, right? We name the price that we

want because we get to select a strike

price. Any strike price that we want, we

select that strike price. We sell a put

option, right? That's our entry

criteria. That's our entry strategy.

Then from there, if we do get assigned,

if we do get put the shares, then we

move over into the wheel strategy. Okay?

But where I'm going to adapt this

strategy more, and I'm going to call

this the wheel 2.0, is I'm going to be

including spreads. And I'll show you

examples and more around this strategy.

But essentially, I'm going to be using

the same idea of selling options, but

I'm also going to be mixing in spreads

because spreads are small account

strategies. And when you have a small

account, a medium account, or a big

account, regardless, mixing in a higher

growth, riskier strategy like spreads

could really boost an overall portfolio.

So again, when it comes to the wheel

strategy, we essentially only have four

figures that we need to look at to run

the wheel strategy successfully. Let's

talk about successfully running the

wheel strategy, and then I'm going to

show you how I adapt and go further into

the strategy in a more advanced method.

Let's first of all build the foundation.

So first of all, we want to pick an

expiration date. I like monthly

expirations and that's why this should

be September 18 because September 18 is

the Friday in 2026. So September 18

would be the expiration. But always look

for the third Friday. The third Friday

expiration is a traditional expiry. And

I like to do monthly options. There's

nothing wrong with weekly options. And

when we go over some examples, you'll

see that weekly options are completely

okay. But when we talk about using the

wheel 2.0 strategy, which is what I'm

discussing in this video, and adding

spreads on top of the wheel, it's going

to be way, way too much to manage. And

that's not what I like to do. I like to

keep management process very simple. I

have my students that are engineers.

They're super busy in their IT jobs. I

have grocery store workers. I have truck

drivers. I have everything you can

imagine in terms of career fields. And

all of them are pretty demanding. So

when it comes to option trading, I like

to make it as simple as possible for

anyone that's a beginner or even if

you're an intermediate already trading

options, I want to simplify the process.

So for me, monthly is better, especially

when you're doing the wheel 2.0. Now, in

terms of strike price, you get to select

the strike price. So whenever I sell put

options for example, I'm always just

going out of the money. Okay, it's

actually really interesting because

people get really caught up. They make

this huge mistake of like, well, what's

the optimal strike price? What's the

perfect strike price? And honestly, that

can be calculated. You can use technical

analysis, you can use fundamental

analysis. But if I'm going to make this

stupid simple, like very very simple,

just go for out of the money. So

whatever stock you're looking at, if you

go out of the money, that's already

better than buying the stock at that

exact strike price. Let's say we have

Apple stock at $300 per share. Well, by

selling a strike price of$ 295 and

getting paid for it already better off,

right? You don't even have to be a

genius. You don't have to use the higher

level things that I teach within my

Discord community to just be right when

you're selling a put option, collect

premium. Either you get assigned, which

is great because you want to get

assigned on stocks that you want to own.

So, you would never want to run the

wheel strategy on a stock that you don't

like. So, if you like the stock, not too

much can really happen that you should

be negative about. You should be pretty

glad whenever you get a sign. And if you

don't get assigned, well then you get

the premium, right? So strike price,

just go out of the money. That's the

most important factor. Okay, we'll build

up and I show you some examples, but the

basic foundation is out of the money

options is the way to go. You probably

seen that somewhere on the internet. If

you haven't, well, let me introduce you.

Out of the money options are way better

than, you know, in the money options

because that's essentially all it is.

It's already built in. So out of the

money by definition already has a

built-in kind of discount for you. Okay,

so amazing stuff, right? So for the

premium, I do have a formula. Again, I'm

going to keep mentioning my Discord

community because I think it's the most

valuable asset and resource that I've

built over 7 years with lots of

successful students. But let me sum up

kind of how I look at premium. Premium,

the number is not that important. What's

actually important is the premium that

you're getting and the capital that

you're putting up, right? It's in

context, right? I used to ask my

students a lot on my calls. I would say,

"Hey, is $100,000 a lot? Is it good?"

And I would wait for the answers, right?

I would say, "Is it good?" Right? I

would wait for them to answer. And in

the chat, people say, "Yeah, it's good."

Most people would say, "Yeah, it's

good." Right? because $100,000 is a

really strong and good income for a

majority of people. And then I would say

San Francisco, $100,000, but you got to

live in San Francisco. And then all of a

sudden, everyone's like, "No, no, no,

no, no, no. $100,000 is below the

poverty line in San Francisco." And I'm

like, "Right, right." So, you need more

context. It depends on location, right?

And also didn't even mention the time

period. If I say $100,000, you're like,

"Great. I didn't say per year. Maybe I

said per decade." Right? Per decade. Oh,

that's that's awful. That's really bad.

What if I'm like $100,000 per decade in

Kolkata, India? Okay, maybe that's okay.

Maybe that's uh average or even above

average. I would probably say in a

smaller village of India, right?

Probably Kolkata is not a village. It's

a city. But anyways, you get what I'm

saying, right? So, it depends on

context. It depends on time. It depends

on location whether a certain salary is

good. Well, the same thing is the case

for premium. It's the same exact thing,

right? So, premium in it by itself

doesn't really mean anything. It's

premium, right, over how much capital

you're putting up and then time as well,

right? I'm not going to get too

complicated here, but you get the story

that I'm trying to come across here,

right? So that's kind of how I look at

premium. Whenever I'm looking at

premium, I take multiple factors into

consideration. Delta, I like.3, so

that's why I have.3 here in my slides. 3

delta is essentially an out- of-the-

money option. An at the money option

will almost always and typically be

around a 50 delta. Okay? So 50 delta is

right at the money. And when it comes to

selling puts, out of the money will be

under or lower than the current value of

the stock. Okay? And for covered calls,

it's going to be over. it's going to be

higher. Right? So, the main thing that

we're doing with the wheel strategy, and

I've covered this a lot on my channel,

but the main thing with the wheel is

we're not trying to predict the stock.

That is not what I'm trying to do. A lot

of investors are getting tripped up with

what's hot, what's going up, right?

What's the news saying, what's the Fed

have to say, right? Where are stocks

going? I don't like that game. I really

don't like that game. I actually think

that that game is borderline scam. Okay?

I borderline think that anyone trying to

predict stock price is just wasting

their time and they've been sold a fake

dream that predicting stock price is

possible. It's really not possible in

the short term. And I have a finance

degree. I worked on Wall Street and I

have seen many investors, many traders

crash and burn trying to predict the

market. Every single day we see

different opinions from analysts. All of

that stuff guys is not that useful.

Okay? I worked in the industry and I'm

telling you the cold hard truth right

now because I can over complicate this

and tell you you need this, this, and

this to make you think that you're

missing something so I can sell you

something, right? Let's not even go

there, okay? A lot of people are selling

programs. You don't need that. I'm going

to try to give you everything that I can

about option selling in this video. And

transparently, I want you to to then

decide, do you need help from there?

Hopefully, I can be your mentor and

coach, but honestly, I don't even want

you to pay for anything. I just want you

to understand the market is incredibly

difficult to predict. the wheel

strategy. The way I look at it is I'm

not trying to predict where the stock's

going because that is impossible.

Instead, what I'm trying to do is I'm

trying to look at stocks already in the

market that I like that I'm already

bullish on, right? So, let's say we have

Nvidia, we have I like SoFi, there's um

you know AMD, there's Mac 7 stocks like

Meta. I think Meta is super oversold

right now. But anyways, my opinion or

other people's opinions doesn't matter.

Find stocks that you like and then

without having to predict them, sell

options and use the wheel strategy.

That's where the whole foundation of my

core strategy really lies. Okay. And

we're profiting basically. You can see

here you're not selling a stock. You're

profiting from time decay. You can see

here days to expiration. Okay. And dates

to expiration here is 90. So as time

moves the option loses value. Okay. So

as it moves it loses value. And ideally

why I sell options that are monthly is

because if I sell an option that's

already in this stage, right? If I sell

here somewhere around this stage, 30 to

45 days, that option is already on its

like decline. It's already seen its best

days, I guess. Let's say that, right?

It's like buying a Lamborghini that's

new. As soon as you drive it off the

lot, it's worth immediately less because

there's already an owner to that

Lamborghini, right? So, anything that is

owned already usually has less value

unless it's like an antique car, right?

But here, we can see that options decay

and they decay significantly, especially

in their last 30 days. Very important,

right? So that's why I typically sell

puts or if I already have the stock, I

sell covered calls as part of the wheel

strategy in this zone. This is like my I

don't know, let's call bicep over tricep

zone, right? I like to say bicep over

tricep because I'm making money hand

over fist, bicep over tricep with my

students. That's my bicep over tricep

zone. Okay, right around 30 to 45 days.

Hey, a little bit less than 30 is fine,

too, right? A little bit under is okay,

too. But this zone right here is the

bicep over tricep zone because these

options are on their way to expiring

worthless. And that drop happens

increasingly fast as we approach

expiration. Well, people might ask,

right? Well, Henry, let's say that this

option is going to decay and go down to

zero. And that's happening incredibly

fast, exponentially quickly as it

approaches zero. Why don't I trade

weekly options? Why don't I trade one

day options? I do that as well, but it's

more management. If you're starting off

right now and you're watching this and

you're thinking, "How do I sell options?

How do I generate, you know, an income

that's comfortable for me, right? I have

personally many students of mine that

are generating five figures per month,

right? Multiple five figures per month

if they have a bigger portfolio. I have

a student right now that I was talking

to yesterday. Um, he works at a grocery

store. That's why I mentioned grocery

store earlier in my video. But I was

talking to him. He doesn't have a big

pay. Obviously, working at a grocery

store is low pay. And he made $5,500

from the strategy that I'm going to show

you, which is essentially the wheel 2.0,

0 which gave me the idea of making this

video actually because a strategy that I

was doing with him I realized huh I

didn't really teach this on YouTube been

teaching this one-on-one but I haven't

taught this on YouTube so I'm wanting to

share this now but he's done really well

and his portfolio is not big he is an

older gentleman so he has not had the

fortune he went through a divorce he

hasn't had the fortune of really being

able to save that much money he had a

good amount saved but then obviously

divorce you know how difficult and

expensive that is but he's doing very

well right now and we're still new in

our relationship we're only a couple

months in He's done 5,500 last month and

the first month was slower cuz we had a

ramp up period. He's done like 2 2200 or

so. So, it wasn't a lot in the first

kind of few weeks and then last month

was really big. Who knows what's going

to happen going forward, but it's been

really successful and I'm very confident

that his portfolio is pretty small. So,

5500 I'm actually a little bit

surprised, but we did pick more volatile

stocks and he doesn't have the luxury of

having a lot of time. So, we are doing a

little bit shorter term stuff, but you

don't have to. That's that's the whole

point. depends on your own personal

preferences and that's why everyone is

going to be different. So, I'm just

trying to help you understand the full

spectrum of taking more risk and going

shorter term can work but more

management. Um, so yeah, basically when

it comes to the wheel strategy, you

really get to name your price. They pay

you for it. That's kind of the most

attractive thing. I'm going to go a

little bit faster here. I respect your

time. I want to make sure I go faster

here. I'm I'll go through my slides here

efficiently, I promise. And then we'll

get to some examples. But um yeah, the

the thing that I want you to really

understand and I want to drive home here

is you get paid today in cash whenever

you sell options, which is amazing.

Right now, of course, not all options

succeed. Of course, there are downsides

to the wheel strategy. There's mistakes

and we'll discuss that. But for the most

part, I deem this to be one of the more

consistent strategies that I've come

across and I'm still running it today

with the majority of my portfolio. So,

you can see what I'm teaching is

actually like I eat my own cooking.

Okay? when I was back in college and we

had a hedge fund guy come in, teach us

students. I was a senior in college at

the time. The guy was managing his own

money in terms of a hedge fund, but he

also had his own portfolio. He's like,

"Guys, I eat my own cooking." And I

really like that kind of quote from him.

And it's kind of stuck with me for all

these years because I'm proud to say

that whatever I teach is what I actually

do. Whenever I have my Monday and

Wednesday coaching calls, I'm doing all

the stuff I'm teaching. I made my first

million dollars option trading. So, yes,

I'm a coach and yes, my time is very

valuable and I make other people a lot

of money and I'm happy that I help a lot

of people and yes, I charge for it. But

I'm proud to say that my first million

came from option trading before I was

ever coaching or, you know, charging for

for coaching or for time or for anything

really. So, I eat my own cooking and

this is incredibly important for you to

learn because this is what allowed me

to, you know, become financially free.

So, here is like basically more

structured overview of the cash secured

put. And again, a cash secured is really

important because you don't want to sell

puts that are not cash secured. You want

to have the cash, right? I do margin

trading, but again, that's getting into

the more advanced stuff that I don't

teach on YouTube because it can be

incredibly dangerous. Obviously, I'm not

a financial adviser or anything, so it's

very dangerous to use margin. We're not

going to go there. We want to be cash

secured. Whenever we're running the

wheel strategy or the wheel 2.0, which

I'm going to talk about, cash secured,

we need to have the cash. No ifs, no

buts, has to happen, right? So, for the

wheel 2.0, essentially, we can stick to

the basic level of option trading and

option selling that I usually cover,

which is still 30 delta. You can see

here 40 to 50 delta is only if you

really want the shares. Okay, you're

welcome to sell high delta, but just

know that your risk of assignment is

also increased because delta is

essentially a proxy for your chances of

assignment. That's what delta is. That's

one of the main definitions of delta.

It's your proxy in your chances of

getting assigned on the stock, right?

So, if you pick a strike price that's 40

or 50 delta, well, you have a 40 50%

chance of getting assigned. Okay,

nothing wrong with that, but I prefer

30. I like 30 because I can get some

premium under my belt. Statistically

speaking, seven out of 10 times I would

collect premium before I ever get

assigned because 30 delta is 30% chance

which means there's a seven out of 10

times that I won't get assigned. So I'm

pretty happy with that. I really really

like that. And that creates income and

income and cash flow is amazing. It's

more important than uh having a bunch of

assets cuz you spend money, right? You

don't look at your I there's some guys

that um I met in Colombia that were just

hanging out and we were talking about

you know assets and everything and then

this guy's like I have $15 million. I'm

like great. He was complaining to me

like he didn't want to spend extra money

on guacamole. It's Colombia doesn't have

Chipotle but they have like this burrito

place and then like guacamole was like

extra or whatever or the topping was

extra. It was maybe it wasn't guacamole

because guacamole or avocados are like

super cheap in Colia but it was an extra

topping. He didn't want to pay for it.

I'm like dude you're worth $15 million.

He and this is not my student. This is

just a guy had a few buddies there. He

was older guy. He was in his 60s. I'm

like dude if you have all this money

like why are you skipping out? You know

didn't make sense to me. But at the same

time, it did make sense to me because

probably his cash flow is bad. And I

didn't get too personal with them. But

that kind of just tells you the story.

It's not about assets. It's about like

how much cash flow are you producing?

Cuz when you have cash flow, then it's a

lot easier to spend the money. So that's

what I focus on my coaching program.

It's like how do I build cash flow?

Assets are cool, but looking at $15

million as as I just told you, like it

doesn't make you more comfortable to

spend the money because it's just

assets. So look here, when it comes to

my strategy with the wheel, right? You

can you can just read here. I'm going to

skip over this slide. You kind of get

the point of how to run the wheel

strategy, which is sell puts. If it

stays above, you're good. If it drops

below, you get assigned. If you're

assigned, fine. No problem. You go into

second step of the wheel, which is start

selling covered calls at that point. So,

in this example, you see a $50 put. I

collect $1.50. I want you to just

understand where the break even is. The

break even is $48.50. And I also want

you to understand that the break even

has another kind of benefit or the way I

look at break even. I don't really look

at break even as break even. When it

comes to the will strategy, I look at

break even as my average cost because

that's essentially what it is. So, when

I sell a $50 put option and I get a

$1.50 50 or 150 bucks. My effective cost

is $40.50. So when I get assigned 100

shares, my total outlay of cash is

$4,850. My average cost is $48.50.

Amazing. Amazing, right? Of course,

selling a put is similar to stock. So as

you see here, I mean, we we're capped on

the upside, but we can go down. We go

down with the with the stock. It's a

bullish strategy. This is essentially

the higher you go into the money, right?

The more the stock falls, the higher the

delta. The higher the delta, the higher

chances you get assigned. And in theory,

the higher chances you get assigned

means effectively you own the stock. And

that's why this chart looks very similar

to just owning a stock. You go down.

When it goes down in price, you lose

money. But again, I'm not too concerned

with that because my goal is to get

assigned. So, it's not really a problem.

So, assignment isn't like risk. The drop

after can be risk. So, if it continues

to fall, that's a risk, right? So, you

own it at 48.50. And if it trades at 40,

yeah, you're underwater a bit. And so

many people get tripped up all the time.

I have an assistant coach in my program

and I do the coaching, but sometimes um

I have an assistant coach where he'll

come on on a Friday and he'll show

rolling strategies in my Discord or he

will go over common mistakes. He'll do

some live coaching on a Friday. And we

get this all the time. People are like

in panic mode. That's his exact words. I

was talking to him the other day. He's

like, "People are in panic mode." When

the stock falls down a lot, they're

like, "I'm losing money. What do I do?"

And you know, they're in panic mode. But

the truth is, yeah, you're down. you

have an unrealized loss. Like if you

sell right now, you will lose money. But

we're not here to day trade. We're not

here to never experience any falls,

right? That's not personal growth. When

we look at the stock market, we should

be expecting some tough times. But tough

times don't last, right? Eventually the

market recovers, it goes up. And that

has been the case every single time.

Every single the time the market goes

down, my comment section is full of

Henry, like you know, you were wrong

this and that, but my portfolio has

generated me yearly income that has met

my expectations to stay in retirement.

And you know, I'm in my mid-30s. So, the

results speak differently. And I'm not

just saying about myself, my students.

Once they understand that market

volatility is not an issue, if you hold

the stock and it recovers, you're not

down as your end result. You're only

down in the moment. Yes. If the stock

falls down, you decide to panic and

close. Yes, if you don't have any

guidance and you decide to do that all

by yourself, yeah, you'll lose money, of

course, because the market has

volatility and it doesn't only go up, it

goes down as well. Welcome to the stock

market, right? So, I don't view that as

an issue at all. So, yes, one of the

risks is it goes down to 40. But the

main risk is you. The main risk is that

you make the mistake of not having

confidence in your own stock or getting

into the wrong stock and then, you know,

not wanting to own it anymore. So, if

that's not the case, okay, and let me

just say, yes, the stock can continue to

fall and, you know, it could break down.

a perfectly good company could go down

to the dumpster. It happens and you have

to realize and understand when that is

the case and that can be the case.

That's going to be beyond this video.

But sometimes that's the case and I make

a decision to get out of this strategy.

That's very few and far between, right?

Because I'm not really running the wheel

on maybe stocks. I'm I'm running it on

stocks that I'm very confident and

comfortable in. Okay. So, here is a

paycheck on shares that you already own.

We get that point. Sell the ceiling

you'd be happy to hit. So, that's on the

covered call side. I'm going to speed

things up. Whenever you sell the cover

to call, you got to be happy to get out

of the stock at that price. I had

another student, a woman that was

uh I love all my students. She was a

little difficult. She was a little

difficult with me. It was a hard

conversation. She was very upset at me

cuz we sold covered calls. Stock went up

a lot. It was actually on Nebas was on

NBIS. This is a little bit ago. Nebia

has since crashed then recovered again.

But anyways, we did a covered call, did

exceptionally well, exceptionally well.

Okay. we only put up about 20K and um in

terms of premium that we had as an end

we only put up about 22K and then the

premium that the option provided was

like 3500 okay and I was very happy with

that and she was happy with it going

into the trade but then a little later

when the stock went up rising a lot she

was not too happy it was actually a very

difficult conversation because I do

one-on- ones and I was having a Zoom

call and she was with her husband and

man they were giving me a tough time

they're like Henry this was the

stupidest thing ever I'm like well It

looks like the stupidest thing ever.

Obviously, we could not have predicted

this. And to be honest with you, we had

put up $22,500

or or so in capital and then our exit

price meant that we were essentially at

$25,500. So, we had actually made money

together, but there was some, I guess,

bitterness because we left money on the

table. And I mean, I'm not perfect. You

know, I told you how the strategy works.

So, it's really important to, you know,

understand where you're comfortable with

the ceiling because if that ceiling is

too low for you and, you know, you're

going to be upset and don't pick that

low of a ceiling, right? We got to plan

either together more properly or doing

it yourself, have to plan a little bit

more properly, okay? So, the ceiling is

very important. So, yeah, keep the

shares or sell at your price if it is

below the strike price. So, if it stays

under $55 or whatever your strike price

is, no worries. You can just keep

selling covered calls as as long as you

wish. But if it closes above your strike

price, you're at the ceiling. You're at

the ceiling. That's not your shares

anymore. Not your shares. So the ceiling

that you agree to though, you do agree

to the ceiling. So you can see your cap

here. And this is the part that isn't

yours. This is the, you know, if I could

draw an angry face, I would draw it

here. This is the some investors are

angry. I didn't make as much as I could.

Look, don't beat yourself up. I mean,

the strategy is not designed to be a

home run strategy. I mean, I have

strategies um that I've talked about

very recently. If you're subscribed to

this channel, just go to my playlist,

look at LEAPS. Leaps are great. Leaps,

if you just buy a LEAP, it's just a call

option. You have all that unlimited

growth. If the stock goes up, you

participate in it. You don't cap your

upside. So, if that's more your style,

great. I love that as well. I have a lot

of these different strategies in my

portfolio. Whenever I work with anyone,

we we figure out a plan together. What

does that student want? Where does he

want to get to? Right? Because I

typically see three different types of

students. I see um those that are just

very close to retirement, have a big

account, they just want that slow and

steady. That's great. But a lot of

people are not there, right? Because

obviously, you know, the world is tough.

You know, things happen. People don't

save enough money and they're caught

scrambling and they have, you know,

several years until retirement or hey,

maybe they're in their 40s, but they

don't want to work. They don't want to

work so hard. They're not getting paid

what they deserve and they just need

more money to take care of themselves

and their family. So, they want a growth

plan that allows them in the next

several years to really hit a much

bigger target. And that's great. That's

the type of person that I help all the

time. That's the type of person that I

was when I was more in the beginning of

my journey when I scaled my personal

account from $100,000 to $700,000. So

when I was there, I was using leaps.

Okay, so those are the two. And then the

third one is, you know, growth and

income mix. So we won't go too deep into

that as that's kind of obvious. But um

yeah, so if you cap your upside, that's

the trade. All right, you set it, you

forget it. That's that's my model. Okay,

so sell one, buy one further away. This

is where we're going to All right, now

we're the part that's interesting. Now

we can move on from the wheel strategy

to the wheel 2.0. 0. Okay, I want to

talk about credit spreads. Okay, I want

to talk about credit spreads because

there's two different credit spreads.

Okay, and I'll show you an example.

We'll open up my phone and everything

will go through my portfolio. Uh, but

there's two different credit spreads.

Okay, there's a call credit spread and

there's a put credit spread. Okay, this

is something that is kind of a delicate

subject because they can be very risky

and they could be done so in an

interesting way where they're out of the

money just like a wheel strategy and

they could be a safer strategy to

deploy. depends on your goal and we're

going to talk about the different ways

that I use it and how I adapt my own

wheel strategy with these. So, let's

understand credit spreads. Let's kind of

go step by step here. So, uh if you sell

an option like a put option, same

selling strategy, right? Very, very

similar how a credit spread works. It's

basically like selling a put option,

right? And here's the first one. Selling

a put credit spread. So, what is it? You

sell a put same way as you just sell a

regular put, but now you buy a cheaper

put below it. Okay? So, you want it to

stay above the strike that you sold.

This is the one that I use more, by the

I use put credit spreads a lot more

because a put credit spread is similar

to a sell put. Okay, so a sell put is a

moderately bullish strategy. The stock

stays the same, you're fine. If it goes

up, great. If it goes slightly down,

you're still okay. It's basically just

it can't crash, right? If a stock

crashes, then your sell put hurts. Same

thing with the put credit spread. It's

the same thing. Okay, let me actually I

can show you. I'll uh we'll switch from

my presentation here. All righty. So,

let's go over a credit spread. I'm going

to just show you this example on Apple.

I'm going to just show you how this

works step by step what I would be

doing. Right? So, here we have a stock.

We have Apple stock over the last one

month. It's down 4.95%. We can see here

that seems to have really, really good

support at $300 per share. So, the way

you would open up a put credit spread,

very similar to how you would sell a put

option. Let me go to sell. Let me go to

put. Okay. Let me go down here for an

expiration. I'm going to go for

September 18 expiration. So, here we

have September 18. And now what I'm

going to do is sell put option. I'm

going to go down lower. So, of course,

we see that there's pretty decent

support at 300. I'm just going to be

safe and go down to 290. So, 290 here,

22 delta. Not bad. Let me go for 285.

Okay. So, this I already know is going

to have lower than 22 delta. Has 16

delta, which is actually pretty low. And

I'm going to adapt this a little bit

because whenever I am doing the wheel

2.0 and I'm just selling a um you know,

a put credit spread, I am not doing too

many contracts. Instead, I opt to do

kind of a wider amount. So, instead of

doing a $5 width, I'll just go for $10

width. So you can see right here that

this is actually very very attractive.

I'm going to kind of zoom in here. You

can see the max profit on this trade

example is $106 and the max loss is

$8.94. So what did I do? Okay, well I

sold the 285 just like I would sell a

regular put option. But now I bought the

275 creating a spread. Okay, you can see

here it says put credit spread. So Robin

Hood knows that this is a put credit

spread. These are two option legs. Okay,

there each leg is well 285 is one leg

and 275 is a second leg. You can see

here that the max profit is about 100

bucks. Max loss here is about $900.

Okay, so this is actually very very

attractive given one month. I mean I'll

I'll put up on the screen right now how

much this this adds ends up being like

103 divided by 8.97. If I am right it's

going to be like 11.2 or so in terms of

percentage which is obviously very

attractive. So you know what can go

wrong here is if Apple goes below 285

which can happen but again I usually do

this uh spread strategy along with the

wheel. So, I would sell a put credit

spread when my covered call is in the

money because I want to create some

income when my covered call is going to

basically get called away from me. I'm

going to lose the shares. Well, I'm

adding exposure this way. I'm adding in

some positive delta. What I mean by

positive delta is I'm making money

essentially. If my shares get called

away, fine, I'll make money here. If you

know stock goes down, then my covered

call is not in the money anymore. Well,

I made money there, but now this

position is going to be at risk. Well,

okay, that's fine, too. Then I'll kind

of manage it from there. You see what

I'm saying? So, if the stock is high and

I sell a put credit spread and it stays

high, I win, right? Because covered call

is going to sell out anyways and this

put credit spread, it's it's nice,

right? It creates some income. But if I

sell a put credit spread and the stock

goes down, well, I'm in a good situation

because my covered call is no longer in

the money, but now my put credit spread

is going down. However, Apple could fall

down five or 10 bucks. I'd still be out

of the money. So, this is a very

versatile strategy. This is what I

really like. And of course, I'm trying

to keep it as simple as possible, but

there's many different situations, but

the most common situations is

essentially if you sell a put credit

spread and it stays out of the money,

you're good. That's that's the most

common situation. If you're out of the

money, and the delta here is very very

low. Okay, let me go over a call credit

spread now. Okay, so let's kind of

reverse this. Let me use a different

example. I'm going to use Palunteer.

Okay, I'm going to use Palunteer right

now. I love this stock a lot. I've

talked about it so many times on the

channel, but it is a little bit

expensive. It is a little bit expensive

right now. So let's say that you know we

are a little bit bearish on it. We're

running the wheel. Okay, we ran the

wheel very aggressively and we sold the

180 put. Okay, whatever. This is an

example. Okay, and now Palenters is at

176. So we're about to get assigned.

Okay, so what can we do? Well, we sell

some call credit spreads against it. So

let's go for the same expiration

September 19. Sell call. Let's say that,

you know, look, it was at 180 and it

pulled back significantly. Hey, I'm

confident this stock is not going to be

at 185 in the next 30 days or so, right?

So here we go for 185. We sell this.

We'll do a $5 width here. So 185, we

sell 190. We buy. And there we have it.

We have a call credit spread. And now if

Palunteer stays lower, okay, we get

assigned in our wheel strategy, but we

make some money off of the call credit

spread. Okay, so this call credit spread

right here, max profit 158 and 342 in

terms of max loss. You can see how

attractive uh this can be. Obviously,

position sizing is very important. very

very important because if you do a big

position and balance here skyrockets you

can lose you can lose a ton of money. So

you want to be very careful here. And

the way that I adapt this in my own

portfolio right now is whenever I have

the wheel let's say I have 10 grand in

the wheel I'm only playing around 5 to

8% of that value with a spread. So

essentially whenever I have like a 30k

position okay I'm just doing you know a

small amount really small amount like

$1,500 in terms of a spread. But it's

nice because as you as you can see, I

mean, this right here, I'm risking 340.

So, you know, if I wanted to risk a

little bit more, let's say I wanted to

risk $1,500, then you can see here I'm

risking 1,700 here, but 800 in premium,

I mean, in a month on just like some

side money to optimize my wheel

strategy. I mean, I find this very very

attractive. So, you can see here, know

your worst case before you place it. So,

of course, whenever we do a, you know,

spread in general, we understand that

the width of the spread is our risk,

right? So $5 width times 100 shares,

that's a $500 total risk and that's as

much money as we can lose. But if we

collect $150, well then you know here's

what we can lose, right? So 150 is

collected out of the 500 which reduces

our overall risk down to 350. So this

would be the most amount of money that

you can lose. So you know both these

numbers from day one, which is what I

really like. Um I really like my risk

and return. I like to know that number.

Whenever you're buying options, you

don't know that number. You don't know

at all what's going to happen to the

stock. So it's hard to judge. where is

your exit point and that's why it's much

more volatile whenever you're buying

options versus selling them. Okay, so

here is kind of how it works as well. So

both ends are flat. Okay, so if you do a

put credit spread, so let's say that you

sell the $50 put and then you buy a $45

put, which is $5 lower, the flat left

end is your max loss. Okay? So if the

stock goes down from 50 to 45, that's

that's where you experience your full

max loss at 45. You lose the full 350.

below that doesn't matter if the stock

goes down to zero. I mean, you don't

care anymore. You know, at 45, that's

your bottom point. And of course, in the

middle here, okay, from $45 to 50, you

have a varying range. Okay, so your

break even is 48.50. So, a little bit

under and you start going into the red,

you start losing money, okay? But even

if the stock is somewhere within this

range, and by by the way, this is an

important range to actually manage this

strategy because yeah, if you're in this

range, I'll show you a little bit later

what managing the strategy would look

like. Essentially, I usually close

whenever it hits in the money. If it

goes into the money in this area, I like

to just close out the option. That's a

very simple process that I follow. Okay.

So, here we have you don't need cash for

100 shares. So, if we sell a put option,

we obviously need $5,000 with a spread.

$500. Very, very amazing, very

advantageous. So, this is the real

reason that most people use spreads.

They have a small portfolio, they want

to be more efficient, or they have a

bigger portfolio and they want to be

more efficient. Nothing wrong with being

more efficient. I like efficiency. So

the same idea but a tenth of the money

that's why a smaller account can run it

is because it could be the same stock

could be the same strike price but

because you're buying another option

let's go up here again you are closing

this off and you're creating a defined

risk which is the difference in the

width so if it's $5 it's 500 that's what

we see here okay you can create

different spreads you can create a

$1,000 width you can create a $100 width

I don't really suggest that because I

think when the width is very small

specifically then you're losing a lot of

money to the bid and ask spread okay

options have bid and ask spreads and

whenever you're trading, even if you

think it's free on Robin Hood, oh boy,

it's not free. I'll tell you that right

now. It is not free. Robin Hood charges,

they just charge you indirectly. So,

yeah, lesson learned there. Yeah, small

wins and one big loss. So, of course,

I'm going to be honest with you. Does do

spreads win all the time? No, they don't

win all the time. That's not uh any

strategy that I know of in this planet,

this universe. I don't know. Nothing

always wins, okay? There's always risk,

but it's not really an issue. What you

really want to do as an investor when

you're trading options, when you're

selling options, when you're learning in

this video how to use my wheel 2.0

strategy, you just want to have positive

expected return. That's it. Because even

a casino, even when they play blackjock,

the casino loses a ton as well, right?

But they know that they're going to be

profitable at the end of the day because

of a concept called law of large

numbers. They know over a long enough

time frame, they have an expectation to

make a profit. They have an expected

profit. Same thing here. Okay, this

picture right here is beautiful because

if you collect 150, you lose 350. That's

bad. If it's 50/50 chance, but it's not

a 50-50 chance, right? It's not half and

half. Your goal is to win many times on

the 150. And then this 150 150 adds up.

And sometimes you'll have a loss of 350.

It all comes down to your execution and

your management and your exit plan.

Those three things and you execute, how

you manage the strategy, and then how

you close the strategy. That is the

whole secret sauce. The the lesson

itself isn't too difficult. It's

managing which is a practice which is

why I have an ongoing community because

it is a practice. It's like practicing

medicine. It's like practicing law. It's

a practice and it changes. It can depend

on the market. It depends on many

factors. But that's your whole goal is

if 150 you can collect and that adds up

to more than your losses. Great. And

this has been my overall experience when

I have picked the right credit spreads,

the right stocks. I've used technical

analysis. This has been pretty much what

I have experienced personally as well as

my community of course. So you don't

have to just sit and take it, right? So

whenever it goes into the money, you

could roll it. Spreads are very

difficult to roll. So I typically do

sometimes roll the wheel strategy, but

when it comes to spreads, it can be

difficult. Also, I am actually secondg

guessing if Robin Hood has one button to

close and roll it. Uh typically I've had

to kind of struggle by doing both. So

I'd had to like close one option, buy

back the other option. It's like two

transactions instead of one transaction.

So if you look at Robin Hood as a

platform and you can use a different

broker, right? But when I use Robin Hood

and I have to like roll, it lets me roll

like a self put or recover call, but it

doesn't let me roll spread. And I could

be wrong about this, but I've been in

the platform for a long time. I'm not a

platform expert, but you have to do it

as two different transactions, which is

fine, but just a little bit extra work,

right? Um, this is typically what I

choose to do, though. I is I close

early, so I take a small loss and I just

move on. So, yeah, I just get out of the

trade if it goes into the money and I

don't believe that the technicals look

good to me. Okay, so I want you to

understand that more premium is

typically worse odds. Okay, a lot of

people make the mistake of chasing

premium, but here's my sweet spot. So,

you can see here that higher premium

typically is higher delta. It's really

that simple. It's literally a trade-off.

Higher delta means higher risk, which

means higher premium. And then lower

delta means lower risk and lower

premium. That's you can see it's very,

very linear. Of course, I'm

oversimplifying this as part of my

education here, but it's more or less a

very linear process that risk is return.

That's the fundamental equation of

finance. And that's what you learn in in

college finance school like finance 101.

Okay. So yeah, that's why my sweet spot

again is 30. But for spreads, here's

essentially what I'm doing. When I run

the wheel strategy, I end up selling

spreads along with it. Okay. To kind of

adjust the position as needed. So let's

say that I have the wheel strategy. I've

sold puts and the stock has crashed.

What I'm going to do to benefit myself

and to collect some premium is I'm going

to sell a call credit spread against

that position. So, what I'm doing now is

because my position is down, because I'm

in the money significantly. I'm going to

take assignment. I'm now trying to

collect some income and this is how I'm

modifying the wheel to make it

essentially what I call the wheel 2.0 is

whenever I have a difficult time, I'm

trying to balance it out with the

opposite. Okay? So, if I'm deeply in the

money on a sell put, I'll do some call

credit spreads to try to generate some

income here on this side while my put

option is deep in the money and I'm

going to very likely get assigned. So,

as I have a high chance of assignment,

I'm like, sure, I want this stock. I'm

going to take assignment, but now I'm

going to sell a call credit spread to

collect some money and basically adapt

this strategy to make it a more

incomeroucing strategy. Okay, so that's

kind of like one of the ways that I

adapt the wheel strategy. So again, if

nobody's trading it, there's no trade.

Now, on the flip side, if I have a wheel

strategy and I'm in the covered call

portion of the wheel strategy and my

covered call is deep in the money, then

I'm going to be selling uh put credit

spreads. The reason for that is because

I'm about to lose my shares. And because

I'm going to lose my shares and you know

I don't have the shares effectively

anymore because I'm about to lose them.

My chances of assignment are very high

or very very high. They could be 80

deltton. I'm going to be losing my

shares very likely. So what I do is I'll

sell a put credit spread and I'll kind

of go against what's happening in the

wheel strategy. So I adapt where the

wheel strategy is. If it's on the bottom

end then I try to sell some options on

the top end. And if it's on the second

stage of the wheel strategy with covered

calls and I'll try to sell some put

credit spreads. Whenever you're running

this strategy keep this in mind. there's

more stuff for you to be more

successful. This is the 10-second thing

to do before every single order. Make

sure there's a tight bid ask spread. A

wide gap cost you both ways, okay? The

more you trade options, the more you

will lose when it comes to the bid ask

spread. So, be very smart and find tight

bid ask spreads. Also, look for real

open interest. Open interest has to be

there. If you don't have good open

interest, I'm telling you, you're losing

money because it's not a liquid option.

You need liquidity. You need lots of

volume. Okay? So, that's very important.

And then again, I already said the third

Friday, that's where the volume

typically is. So the third Friday, one

of the biggest benefits is there's just

more volume. So it's not just, hey, this

is traditional expiry. Traditional

expiry has some benefits such as more

volume. So again, when it comes to the

core of the wheel 2.0, it's still the

wheel. So you're still selling puts. If

you get assigned, you sell calls, you

get called away. That's fine. We're not

really touching what the wheel actually

is. If you want help implementing this

strategy, I can help install this

strategy within your portfolio during a

one-on-one call. You can message me. You

can learn more about that in the

description. I'd be more than happy to

show you how you can implement this

strategy in greater detail because it

does depend on your specific situation.

But as you have seen throughout this

course, I hope that you have learned a

lot and have seen the benefits that you

can get from adapting the wheel strategy

and using spreads within this strategy.

I really appreciate you for making this

far, for investing in your education, by

spending the time and dedication needed

to build wealth, to grow. I hope you

enjoyed this video just as much as I

have enjoyed making it. If you subscribe

to this video, that would definitely

mean a lot to me. Spent a lot of work

making this video. And thank you so

much.