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Estimate how much capital you may need to target a monthly options-premium income goal — across cash-secured puts, covered calls, or the wheel strategy.
The calculator uses assumption-table yield ranges based on liquid large-cap option premium across multiple IV regimes. It applies a small DTE adjustment, optional margin scaling (cash-secured / Reg-T / portfolio margin), and produces three scenarios — Conservative, Base Case, Aggressive.
What the estimate includes: strategy type, simplified IV environment, DTE turnover adjustment, capital allocation model.
What it does NOT include: assignment risk, stock losses, slippage, commissions, tax impact, changing volatility regimes, execution quality.
Assumes positions are fully cash-secured.
Wheel · Medium IV (IVR ~50) · 45 DTE · Cash-Secured
If IV shifts from Medium IV (IVR ~50) to High IV (IVR ~80): estimated required capital changes from $166,667 to $125,000 (-$41,667 · -25.0%).
| Scenario | Monthly yield | Capital needed | Annualized |
|---|---|---|---|
| Conservative | 0.90% | $222,222 | 10.8% |
| Base Case | 1.20% | $166,667 | 14.4% |
| Aggressive | 1.50% | $133,333 | 18.0% |
Aggressive scenarios assume stronger premium capture and tighter execution. They may be harder to sustain across full market cycles.
A 30% market drawdown on this capital base = approximately $50,000 unrealized loss exposure before recovery.
Premium income does not protect against underlying stock losses. Plan for uneven results and fewer than 12 productive months per year.
See stocks that may fit your wheel + medium iv (ivr ~50) + 45 dte profile.
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Important: These estimates are based on assumed monthly premium yield ranges. They are not guarantees of income, returns, or trading performance.
Methodology note: Yield ranges are planning assumptions based on liquid large-cap option premium behavior across multiple IV regimes. Individual tickers can vary materially based on volatility, liquidity, strike selection, and market conditions.
Cash-secured puts (CSP) sell put options against cash collateral. Typical retail use: target monthly premium yield while being willing to own the underlying stock at the strike price if assigned.
Covered calls (CC) sell call options against owned shares. Lower premium yield than CSPs in most environments, but no additional capital outlay if you already hold the stock.
The wheel strategy alternates between CSPs and CCs: sell puts until assigned, then sell calls on the assigned shares until called away, then start over. Combines premium capture from both sides.
No. It provides planning estimates based on assumed monthly premium yield ranges across liquid large-cap option markets. Real results depend on ticker selection, strike choice, position sizing, volatility regime, assignment outcomes, and execution quality.
Higher IV typically increases option premium, so a given monthly income target can be reached with less capital. However, higher IV also usually means higher underlying risk — premium gains can be offset by larger drawdowns in stock price.
It depends on the IV environment and the stocks traded. Cash-secured puts often show slightly higher monthly yield assumptions than covered calls because put-side premium is typically richer in normal equity skew. The wheel strategy sits in between — it cycles between CSPs and covered calls. The calculator shows all three so you can compare.
Shorter DTE (e.g. 30 days) increases turnover — you collect premium more frequently, raising estimated monthly throughput. Longer DTE (e.g. 60 days) slows the capital cycle but reduces gamma risk per trade. The calculator applies a simple monotone adjustment for planning purposes.
Cash-secured assumes 100% of the notional value is set aside as collateral (the safest model). Reg-T margin typically requires about 30% of notional for short put / covered call positions on most retail brokers, reducing the displayed capital. Portfolio margin (advanced accounts) can require even less. Real broker requirements vary — always verify with your broker.
They are heuristic ranges based on observed 25-30Δ option premium behavior on liquid S&P 500-tier underlyings across 2023-2025 IV regimes. Individual tickers can deviate by 30-50% from these averages depending on volatility, liquidity, and event proximity. Use the calculator for planning, not for sizing actual trades.
It does not model assignment risk, stock losses during drawdowns, slippage and commissions, tax impact, changing volatility regimes, dividend treatment, or execution quality. It also does not account for sequence-of-returns risk — premium income is uneven and concentrated in non-event months.
Quantitative screening, not investment advice. Verify with your broker. Disclaimer