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Lilly (Eli) — Model a full Wheel cycle: CSP entry, assignment, and CC exit
Lilly (Eli) (LLY) operates in the Health Care sector and has actively traded listed options. Selling a CSP now requires $92,300 per contract and spans the earnings announcement in 1d. VRP at +8.8pp reflects earnings-inflated premiums that collapse post-announcement. Risky — delay CSP entry until after the report or switch to a put credit spread for defined risk. See Covered Call for strike comparisons.
Wheel Cycle
Capital: ~$92,322Unfavorable — 2 conditions flagged
The Wheel strategy cycles between selling puts and covered calls. This page evaluates whether the current setup favors starting a Wheel position on this ticker.
Check if you'd be comfortable owning the stock at the put strike — that's the key Wheel decision.
Combines: capital requirement, IV Rank, VRP, signal strength, premium environment, liquidityStock price (for capital calc), IV Rank, VRP, bid-ask spreads, open interest
ORATS options data + VolRadar signal composite
The Wheel requires willingness to own shares at the put strike. Assignment risk is real — stock can drop significantly below your strike. Capital requirements vary with stock price.
Already own LLY shares from a cash secured put assignment? These covered call and hedge strategies work with your existing position to generate income or protect gains.
Own shares + sell OTM call — generate income from existing position.
Same as Short Put but with full cash to buy shares at strike if assigned.
Buy deep ITM LEAPS call + sell short-term OTM call — like covered call but less capital.
Own shares + buy OTM put — insurance against downside while keeping upside.
Own shares + buy put + sell call — zero-cost or low-cost downside protection.
Quantitative screening, not investment advice. Verify with your broker. Disclaimer
The wheel on Lilly (Eli) starts with selling a cash-secured put at approximately 5% OTM. At the current price, a single contract requires $87,700 in collateral. For higher-priced underlyings, position sizing becomes critical — the 5% rule (no single wheel exceeding 5% of total account) helps manage concentration risk. Consider put credit spreads as a defined-risk alternative if capital requirements are too high.
Lilly (Eli)'s current signal is weak, suggesting conditions are unfavorable for new wheel entries. Options may be fairly priced or underpriced relative to expected movement. Consider waiting for the signal to improve, or if already in a wheel cycle, manage existing positions conservatively with wider strikes.
Lilly (Eli) has earnings in 1 days. Earnings create gap risk — the stock could move sharply on the announcement, potentially causing assignment at an unfavorable level. Wheel traders typically avoid selling CSPs into earnings or choose expirations that settle before the announcement. If already holding shares from assignment, consider holding off on covered calls until after earnings.
Cash-secured: $87,700 per contract (100 shares x $877 strike). On margin (~20% requirement): approximately $17,540. Follow the 5% rule — no single wheel position should exceed 5% of your total account.
Most wheel traders sell puts 5–10% below current price (0.20–0.30 delta). For LLY at $923.22, that means selling puts around $877–$831. In higher IV environments, you can sell further OTM while still collecting meaningful premium.
If assigned, you buy 100 shares at the put strike price. Your effective cost basis equals the strike minus premium collected (e.g., $877 - premium). Move to Phase 2: sell covered calls at or above your cost basis. Each call premium further reduces your cost basis.
Annualized returns vary with IV conditions. With current VRP of +8.8pp, the premium environment is strong for LLY. Under favorable conditions, experienced wheel traders may target 15–30% annualized. Conservative 5% OTM strikes with 30–45 DTE tend to yield 12–20% annualized in normal conditions. The key variables are IV Rank (higher = richer premiums), strike distance (closer = more premium but higher assignment risk), and DTE (30–45 days is the theta decay sweet spot).
The biggest risk is assignment into a declining stock. If Lilly (Eli) drops sharply below your put strike, you own 100 shares at a loss — and subsequent covered calls may not generate enough premium to recover before the stock falls further. At Lilly (Eli)'s current price of $923.22, assignment means holding $87,700 in a single position. This risk is heightened with earnings in 1 days — a negative surprise can cause a gap down well below your put strike, resulting in immediate unrealized losses that covered call premiums may take months to recover. To manage this: size each wheel to no more than 5% of your account, avoid selling CSPs into earnings, and confirm a positive VRP edge before entering.
Lilly (Eli) currently shows weak conditions for premium selling. Consider waiting for the signal to improve before starting a new wheel. If already in a wheel cycle, manage existing positions conservatively.
Option liquidity data for Lilly (Eli) is limited. Before starting a wheel, check bid-ask spreads on both put and call sides with your broker. The wheel requires multiple cycles to compound returns, so even small execution inefficiencies add up. Highly liquid names with tight spreads and high open interest are better candidates for the wheel strategy.
Free embeddable tool: Wheel Calculator — add wheel strategy analysis to any site. No signup, no API key.
All P/L calculations exclude commissions, fees, and slippage. Premiums are model estimates (not live quotes) — verify with broker. Actual returns may differ significantly.
100 shares × $877 strike · On margin (~20%): ~$17,540
Sell call at or above cost basis ($850.94) to ensure profit if called away.
Assumes assignment at expiration. American-style options may be assigned early, especially near ex-dividend dates or deep ITM.