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An option whose strike price equals or is closest to the current stock price. ATM options have the highest time value, fastest theta decay, and roughly 0.50 delta.
⚡ KEY TAKEAWAY: Maximum theta but maximum gamma risk. Premium sellers rarely sell ATM — the sweet spot is 1-2 strikes OTM for better risk/reward.
DTE (Days to Expiration)
Enter at 30–45 DTE for optimal theta/gamma balance. Close or roll at 21 DTE or 50% profit — whichever comes first.
Assignment
Not a disaster — it's the plan in the wheel strategy. If you only sell puts on stocks you'd own, assignment is just the next step.
Roll (Rolling)
Roll for a net credit or don't roll at all. Rolling for a debit just delays a loss. Best done before the position goes deep ITM.
Annualized Return
Looks impressive but is misleading if you ignore losses. Track actual account returns, not annualized returns on winners only.