$1,000 – $2,500 Range: Expanding the Wheel

How to Run the Wheel Strategy: Building Momentum

With $1,000-$2,500, you can expand your wheel strategy for small accounts to slightly higher-priced stocks and begin generating more meaningful passive income options wheelincome. This is the transition phase where you're building toward full wheel capability as you learnhow to run the wheel strategy effectively.

Traditional Wheel (Expanding)

You can now run the wheel strategy options cycle on stocks in the $15-$30 range, opening up more opportunities and better premiums. This is how you expand yourwheel strategy for small accounts.

Recommended Stock Characteristics

  • Stock Price: $15 - $30 per share (ideal: $18-$25)
  • Market Cap: Mid to Large Cap ($1B - $50B) for stability
  • Options Liquidity: Good open interest (200+), reasonable spreads
  • Volatility: Moderate IV (30-45%) for decent premiums
  • Company Quality: Established companies with solid fundamentals

Example Position

Stock: $20/share. Sell 1 cash-secured put at $18 strike (30-45 DTE) for $0.75 premium = $75 income. This continues the cash secured put wheel approach. If assigned, you own 100 shares at $18 ($1,800 cost basis). Then sell covered calls at $20 strike for $0.50 premium = $50 income. This is the covered call wheel strategy component. Total potential: $125 premium per cycle. Run 1-2 positions for $125-$250/month.

Income Expectations

With $1k-$2.5k, running 1-2 Traditional Wheel positions can generate $75-$250/month inpassive income options wheel income (5-10% monthly yield). Focus on building consistency and learning position management as you master how to run the wheel strategy.

Complementary Strategies

These strategies work well alongside the Wheel Strategy to enhance income and diversify your approach:

Buy-Write Strategy

Instead of starting with cash-secured puts, buy 100 shares and immediately sell a covered call. This is similar to the Wheel's covered call wheel strategy component but starts with stock ownership. Works well for stocks you want to own immediately. Can be combined with Wheel positions for diversification.

Dividend Income Ladder

If you own dividend-paying stocks from Wheel assignments, you can build a dividend income ladder. Combine dividend payments with covered call premiums for dual income streams. Works especially well with the Long-Term Investment Wheel approach on dividend stocks.

Progression Goal

At $2.5k+, you unlock:

  • Full Traditional Wheel on mid-priced stocks ($25-$50 range)
  • Ability to run 2-3 positions simultaneously
  • Generate $200-$500/month in consistent passive income options wheel income
  • Wheel becomes a real income generator