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A call with a strike below the stock price, or a put with a strike above. ITM options have intrinsic value and higher delta, making them more likely to be assigned.
⚡ KEY TAKEAWAY: If your short option goes ITM, it's time to manage — roll, close, or accept assignment. Don't wait and hope.
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.