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The stock price at which a trade produces zero profit or loss at expiration. For a short put: strike minus premium received. For a covered call: stock cost minus premium received.
⚡ KEY TAKEAWAY: Always know your breakeven before entering. If the stock can realistically reach it, either widen the margin or skip the trade.
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.