I wanted to take a brief detour from our Beginner Wheel Strategy Series this week because, honestly, what’s happening in the market right now is exactly the kind of moment that the series is trying to help prepare for.

The S&P 500 is down over 5% year-to-date as of early April 2026, mega-cap tech (the names we love to wheel) is taking it harder than most, and geopolitical headlines — tariffs, Middle East tensions, oil prices spiking — are creating the kind of noise that makes even seasoned traders second-guess themselves. The VIX has spiked to its highest level since last April’s tariff shock.

So instead of talking theory this week, let’s talk reality. Everyone is probably feeling what I’m feeling right now, so best time to discuss!

📰 What’s Actually Happening Out There

Let’s recap:

We’re in a midterm election year, and historically, the S&P 500 has experienced an average intra-year drawdown of about 18% during midterm years since 1957. That doesn’t mean it’s going to happen — but it means the conditions are ripe for volatility, and we shouldn’t be surprised by it.

On top of that, the macro picture is genuinely complicated right now:

• The Iran conflict has become the most immediate source of market volatility

• Oil prices have surged meaningfully

• Mega-caps are underperforming

This is a compression environment. IV is elevated, premiums are juicy, but so is the risk of getting whipsawed or assigned at levels you didn’t expect.

🪞 An Honest Look in the Mirror

Something I’d like to admit and share, because I think transparency is one of the most valuable things I can offer, is that I’ve been caught breaking even my own rules that I have been preaching lately. I have been caught over-leveraging my portfolio, and in today’s conditions, it’s tough to manage.

I had too many positions open simultaneously — more than my own rules called for — and when the macro shock hit, I found myself fully deployed with limited dry powder to respond. No cash buffer. Several positions going against me at once. As someone who is using this account as income, it was hard to take distributions when there was nothing to distribute!

But was it a total catastrophe? No. The Wheel Strategy is designed to survive moments like this — assignment isn’t a loss, it’s just capital at work, albeit a little tied up. Sometimes, liquidity is more important than recovery, depending on your situation. But did it feel uncomfortable? Absolutely. And that discomfort was a direct result of decisions I made when things were going well. That’s the sneaky part about over-leverage — it feels fine right up until it doesn’t.

So I share this not to be overly dramatic, but because if I can help anyone else in a similar situation as myself, and I suspect some people are, I would just say that its totally ok. It’s not time to panic, but time to refine rules even further and reset.

🧠 The Psychology Trap: Why Drawdowns Feel Worse Than They Are

Here’s something I’ve had to remind myself of during this stretch:

The gains you’ve already harvested are real.

When you’re staring at positions that are underwater, it’s easy to forget that you’ve likely closed dozens of profitable trades this year. The premium income you collected in January, February, March? That’s in your account. It already happened. The pain of the current unrealized loss is disproportionately loud compared to the quiet satisfaction of those closed wins.

This is one of the most well-documented psychological patterns in trading: losses loom larger than equivalent gains. It’s called loss aversion, and it will make you do things you otherwise wouldn’t. Close too early, make panic trades, abandon your strategy. In the end, that’ll hurt you far more than the drawdown itself.

The Wheel isn’t broken. The market is just doing what markets do. What the Wheel does allows and buys you is time.

⚙️ What I’m Actually Doing (The Playbook)

So what am I doing now that we’re here? To re-iterate, these are my goals: your playbook might be different than mine. Income generation portfolio strategies differ greatly from long-term growth strategy portfolios. They share the same principles, but need to be handled differently. Remember what your main goal is and what works for you. But, for transparency, this is what I’m doing with my specific portfolio, step by step:

1. Restoring the cash buffer — first priority, full stop. My framework calls for 20-25% in liquidity at all times. I let that slip. I got confident and told myself I’m good! So before anything else, I’m evaluating each assigned position, identifying what my target is, and I’m closing one or two positions — even at reduced profit — to get that buffer back. Losses in single positions happen and you don’t need to have a 100% win rate to still be considered “winning.” Being liquid can be a win here, and I remind myself that liquidity is not idle money. It’s the ability to respond, your margin of safety, and your psychological insurance policy.

2. Cutting weak conviction positions. I have one position I’m in purely for the premium — high IV, high yield, but not a name I’d want to hold through a prolonged bear market. That’s the first to go. The rule is simple: only wheel names you’d be comfortable holding. If you wouldn’t want the shares, you shouldn’t be selling the put. Basic rules of wheel, and even I broke it! Cutting this even at a reduce profit to get back capital to get it back to work for me properly will return the loss profit far quicker than hoping for this one position to make it back for me.

3. No new positions until I’m back to full compliance. This is the discipline part. The premiums look amazing right now — elevated IV means elevated income potential. And that’s exactly the trap. More premium = more exposure. I’m not opening anything new until I’ve got my cash floor restored and my position count down to my max of 4, with cash buffer in place.

📋 How to Prepare BEFORE the Next Storm

If you’re reading this from a position of stability — great. Now is the time to pressure-test your framework so you’re not scrambling when volatility returns (because it always returns).

Ask yourself these questions:

• Do I have a hard cash floor that I never touch? Not a target — a floor. A number that is off-limits regardless of how good the premiums look.

• Am I wheeling names I genuinely believe in? If a stock went to zero tomorrow, would it hurt your portfolio or just your feelings?

• Is any of my position sizing funded by margin? If yes, that margin becomes a structural risk in a downturn. Short-term settlement bridge? Fine. Structural component? No.

• What is my maximum number of open positions? And are you actually honoring it, or just treating it as a suggestion when things are going well?

• Do I have a checklist for drawdown environments? Knowing in advance what you’ll do when things go wrong removes the emotion from the decision.

The framework I use isn’t complicated. But it only works if I follow it — especially when the market is making it tempting not to.

🌅 The Bigger Picture: This Is Normal

Let me leave you with this.

We’ve been here before. The tariff shock of 2025 saw the S&P drop nearly 19% intra-year — and then it recovered and ended up 17.9% for the year. The fastest bear market in history, during COVID, was followed by one of the greatest recoveries. Every major drawdown in market history has been followed, eventually, by new highs.

That doesn’t mean every individual stock recovers. It doesn’t mean every trade works out. But it means that the strategy — selling premium on quality names, collecting income, staying disciplined — has the right to exist in every market environment, including this one.

The goal right now isn’t to maximize income, profits, or growth. The goal is to survive the drawdown with your capital intact so you can maximize income when conditions normalize.

Protect the base. Stay disciplined. Don’t let the noise make the decisions.

🔜 Coming Up Next

We’ll be returning to the Beginner Series next week, picking back up with Part 8 — Choosing Your Strike Price and Expiration: The Art of the Sweet Spot.

But this week, I hope this post was a reminder that even experienced options traders get caught off guard by the market. What matters isn’t whether you get hit — it’s how you respond.

Happy trading, stay safe out there, and as always — protect the base first. 🛡️

– HL Financial Strategies

This blog is for educational and entertainment purposes only. Nothing here constitutes financial advice. Always do your own research and consult a qualified financial professional before making investment decisions.

Now we get to the question I teased at the end of Part 6 — the one that’s always on everyone’s mind:

Which stocks do I pick?

Everyone wants to know the next hot thing. I get this question every time I tell someone I’m into trading stocks and options. “Oh, what stock should I pick?” Everyone wants the moonshot. The stock that’s going to 10x. But here’s the truth: the Wheel Strategy isn’t about finding the next big winner. It’s about finding stocks that can systematically generate consistent income — over and over again.

Not every stock is built for that. In fact, some of the most exciting, high-flying stocks out there are some of the worst candidates for the Wheel. Let’s break down exactly what to look for.

What Makes a Stock “Wheel-Friendly”?

When I’m evaluating a stock for the Wheel, I’m not asking “will this go up?” I’m asking “would I be comfortable owning 100 shares of this if I got assigned?”

That’s the mindset shift. Because with a cash-secured put, assignment is always a possibility. So the stock needs to be one you’d genuinely be okay holding — not one you’re praying doesn’t drop.

Here’s what I look for:

1. A stock you actually believe in

This might sound obvious, but it’s the foundation. If a stock dropped 20% tomorrow and you got assigned, would you be okay holding it and selling covered calls while you wait for recovery? If the answer is no, it’s probably not a Wheel candidate for you.

I personally stick to companies with strong fundamentals, brand recognition, and staying power. Think large-cap names — not speculative small caps.

2. A reasonable share price

Remember, one contract = 100 shares. A $500 stock ties up $50,000 per contract. A $50 stock ties up $5,000. For most people starting out, lower share prices make it easier to stay within your 25% per position rule from Part 6.

This is why stocks in the $20–$150 range are often the sweet spot for smaller accounts.

3. Consistent options volume and open interest

This one is huge and often overlooked by beginners.

You need stocks with liquid options markets — meaning there are plenty of buyers and sellers at any given time. If a stock has low options volume, you’ll face wide bid-ask spreads, which quietly eat into your premium. You want tight spreads and easy fills.

A simple way to check: pull up the options chain and look at the open interest on the strikes you’d target. Thousands of contracts open? Good. Single digits? Move on.

4. Moderate — not extreme — implied volatility (IV)

Higher IV = higher premium. That sounds great, right?

Not always. Stocks with extremely high IV are usually priced that way for a reason — the market is pricing in significant uncertainty. These stocks can make for exciting premium collection, but they’re also more likely to make violent moves against you.

For the Wheel, you want elevated but not extreme IV. Enough to collect meaningful premium, but not so wild that one bad week wipes out months of gains.

Stocks to Avoid

Just as important as knowing what to look for is knowing what to avoid. A few categories I personally stay away from for the Wheel:

🚫 Extremely volatile or speculative stocks

Stocks with no earnings, meme stocks, or anything that regularly moves 10–20% in a single day. Yes, the premiums look incredible. But so does the risk. One assignment on a stock like this and you could be holding a bag that takes years to recover — if it ever does.

🚫 Stocks ahead of major binary events

Earnings, FDA decisions, major product launches — these create massive overnight swings. If you’re holding an open position into one of these events, you’re essentially gambling. I personally try and avoid opening new Wheel positions within a few weeks of a known major catalyst.

🚫 Low-volume, illiquid names

If you can’t get a clean fill when opening or closing a position, you’re fighting the market every step of the way. Stick to names with active options markets.

Building Your Watch List

Once you understand the criteria, the goal is to build a short, focused watch list of 8–15 stocks you know well and would be comfortable owning. You’re not looking for 100 options — you’re looking for a reliable roster you can rotate through consistently.

Some things that can help build and refine your list:

• Start with companies you already use, know, and follow. Think names of products you’re already using today, like your iPhone!

• Look at large-cap S&P 500 names with active options markets

• Filter by IV rank to find stocks with currently elevated premium

• Track how each stock behaves — does it tend to stay range bound or trend hard?

Over time, you’ll develop a feel for which names work best for you based on your account size, risk tolerance, and trading style.

The Bottom Line

Picking stocks for the Wheel isn’t about being right on direction. It’s about finding companies you’re comfortable owning, with liquid options markets, at prices that fit your account — and then running the strategy consistently over time.

The “boring” names? Often the best ones. Consistent premium. Predictable behavior. And something you can actually sleep at night holding.

That’s the game.

What’s Next

Now that we know which stocks to target, the next logical question is: where exactly do I set my strike price and expiration?

In Part 8, we’ll get into how to read an options chain, pick your strike, and choose your expiration date — so you can start putting all of this into practice.

Stay tuned, and as always — happy trading! 😊

– HL Financial Strategies

• What stocks and options are

• The difference between buying and selling options

• How the Wheel Strategy works step-by-step

• Capital requirements and realistic expectations

• And most recently, what can go wrong

It was a lot of topics! But all fundamental steps to now move into something more practical and what’s usually on everyone’s minds: How do you actually structure this inside a portfolio?

This is the “fun” part once you understand the mechanics and the risks of the Wheel, but now we have to make sure we apply all of the earlier principles when allocating our capital. The next questions I always get:

How many positions should you run?

How much capital should you allocate per trade?

And how do you avoid putting your entire account at risk?

This is where position sizing and portfolio construction come into play.

Why Position Sizing Matters

Position sizing is one of the most important aspects of any options strategy — not just the Wheel, but applies just the same. Even the best strategy in the world can fail if positions are too large relative to the account.

Think about it this way: If one trade goes wrong and significantly damages your portfolio or blows it up completely, the position was probably too large to begin with.

With the Wheel Strategy, the key risk comes from the assignment. When you sell a cash-secured put, you must be prepared to buy 100 shares of that stock if assigned. That means every position has a defined capital requirement. And if too much capital is tied to a single position, it becomes difficult to manage the rest of your portfolio effectively.

In other words, would I be okay to buy 100 shares of XYZ stock, regardless of short term directional outlook, if it were offered to me at X price? This answer should always be yes when entering a cash secured put position. If not, then it’s probably not a position I would want to enter in the first place.

A Simple Rule of Thumb

A guideline that works well for many Wheel traders (myself included) is:

No more than 25% of total capital allocated to a single position.

This means if assignment occurs, that one stock does not dominate your portfolio. For example:

Portfolio size: $100,000

Maximum capital per assignment: $25,000

This allows you to run multiple positions simultaneously while still keeping risk spread across several diversified names.

It also gives you flexibility if markets move quickly.

Running Multiple Positions

Once your capital grows, the strategy becomes much more efficient.

So instead of running one wheel position at a time, you may run several simultaneously across different companies.

For example:

A realistic $100,000 portfolio might look like:

• $20,000 allocated to Company A

• $15,000 allocated to Company B

• $40,000 allocated to Company C

• $10,000 allocated to Company D

• The remaining $15,000 on cash reserve

This structure provides several benefits:

• Premium collected from multiple sources

• Diversification across multiple companies

• Reduces impact if one stock struggles

• Flexibility to open new positions when opportunities appear

As you get a feel for this type of allocation, the Wheel begins to feel more like a systematic income engine. Notice how I don’t evenly spread across each position either, because in the real world, now every single position will be exactly $25,000 x 4 for you! Stock prices vary. So should your allocation. One company can be $100/share, the other can be $400/share.

When to Slow Down

Another important part of portfolio management is knowing when not to open new positions.

Sometimes markets become extremely volatile or uncertain. Currently, we are experiencing this now! With geopolitics, AI disruption, etc., etc. In these moments, it may make sense to take a step back and try to:

• Reduce new trades

• Wait for better entries

• Hold more cash temporarily

The Wheel works best when positions are opened with patience.

Opening too many positions during unstable markets can quickly lead to multiple assignments at the same time.

Building a Durable System

When position sizing and diversification are handled correctly, the Wheel becomes much more durable.

Instead of relying on a single trade working perfectly, the strategy benefits from multiple independent positions working together.

Some trades may be assigned.

Some may expire worthless.

Some may require rolling.

Over time, the portfolio continues generating premium across different names and cycles.

And that consistency is where the strategy shines.

What’s Next

I’ll look to pause here and continue on in the next post, where we’ll dive into something that’s always on everyone’s mind:

WHICH STOCK DO I GET? :)

Everyone wants to know the next hot thing and be the first to know about it, but the Wheel Strategy isn’t about finding the next hot moon shot, but rather, what can systematically generate me consistent income. So we’ll dive in to how to choose the right stocks for the Wheel Strategy, since not every company is suitable, especially those 100x volatile stocks.

We’ll discuss:

• What makes a stock ideal for the Wheel

• Why liquidity and options volume matter

• Why some high-premium stocks should be avoided

• And how to build a reliable watch-list

Choosing the right companies is one of the biggest drivers of long-term success with this strategy.

Once again, thank you all for taking the time to stop by and read. If I’m helping just a single person out there, then I’m satisfied! :) Thanks for reading everyone! Happy trading!

– HL Financial Strategies

In the last post, we talked about capital requirements and realistic return expectations. Now we need to talk about something even more important than the actual system itself:

Risk.

Risk is everything, especially when it comes to options trading. This is one of the biggest differences in blowing your entire account up or preserving your capital. If you’ve been reading up to this point, you may feel that the Wheel Strategy is pretty much a sure thing, with minimal to low risk. It certainly can be, but despite all that, it is not “low risk.”

In short, it is defined and structured risk. But it is still risk. And understanding that is what makes the income durable. Let’s go over the steps.

First: Assignment During a Sharp Downturn

The biggest test of the Wheel happens during market corrections. As of today, we’re kind of in one now, with all of the talks about AI completely “destroying” sectors, and SaaS stocks getting sold off.

When you opt to sell a put, you’re agreeing to buy a stock at a certain price.

If the market drops hard and fast, you won’t just get assigned — you may get assigned into a position that immediately trades lower.

This is uncomfortable (speaking from experience).

Even if you:

• Chose a solid company

• Selected a reasonable strike

• Collected good premium

You can still be down, on paper. This is where the stock selection proves its value, and is essential to the strategy.

If you sold puts on something speculative or unstable, that drawdown can feel catastrophic.

If you sold puts on a company you genuinely believe in long term, it becomes manageable.

Assignment is not the risk. Assignment into the wrong stock is.

Second: Capital Gets Stuck

One of the most overlooked risks of the Wheel is opportunity cost.

If you’re assigned shares during a downturn, your capital becomes tied up.

You may:

• Be waiting weeks or months for recovery

• Be unable to deploy that capital elsewhere

• Miss other opportunities

The Wheel assumes patience, and you have to have plenty of it. Again, going back to the first step, if you sold puts on a company you genuinely believe in long term, this isn’t a problem, but even then it becomes a psychological game.

If you don’t have the temperament or capital cushion to wait, the risk becomes magnified.

Third: Rolling Too Aggressively

I don’t think we covered rolling, but in a nutshell, it’s closing your current position and opening another. Basically, a CSP with a $200 strike price is opened, the stock begins to fall, and to avoid assignment, you open a $190 strike instead and take the net credit in premiums, aka “rolling” the position.

Rolling can be a great tool, as long as you know the opportunity costs.

If not, it’s also one of the easiest ways to damage the strategy.

Beginners often:

• Roll too early

• Roll too often

• Roll simply to avoid assignment

• Roll and end up breaking even

Rolling should improve your position. It’s not to just delay discomfort. If I were to realize a loss by rolling, my new position should at least capture that difference and include profits.

The famous Warren Buffet quote always comes to mind when this comes into play: “Rule No. 1: Don’t lose money - Rule No. 2 Never forget rule No. 1” This resonates with me a lot because in the short term, a roll may be a realized loss, but the final outcome should never be a loss.

Fourth: Volatility Cuts Both Ways

Previously, we’ve discussed premium at length. The stock has to have an enticing enough premium so that this makes it even worth the effort. But remember, that cuts both ways! High volatility inflates premium — but it also increases downside speed.

A stock that pays 5% monthly premium can drop 20% in a single headline.

The Wheel works best on:

• Liquid names

• Established companies

• Businesses you would hold through turbulence

High premium does not equal high quality. In this strategy, durability matters more than excitement. I saw somewhere that basically said if you’re getting excited running the wheel, you may be doing it wrong. The more boring it is, the better it’s working.

Fifth: The “Low Risk” Myth

The Wheel is often marketed as safe because:

• You’re selling options

• You’re getting paid upfront

• You’re willing to own the stock

• You “just” sell covered calls at the same strike you’re assigned, so you can’t lose!

Owning stock is definitely preferred, but it is not risk-free. Even good names. Markets go through:

• Bear cycles

• Sector rotations

• Multi-month consolidations

• Earnings shocks

The drawdowns are real! If your stock drops 30–40%, even if you sell covered-calls on them, the premium collected will not fully offset that drawdown in the short term.

The Wheel reduces directional urgency but it does not eliminate market risk.

Risk Management and Durability of the Wheel

So how can we avoid all of this? What can we do when all of the above does happen (and trust me, it will happen some time or another)? We make it resilient and manage our risk appropriately:

• Size positions properly (no more than 20-25% of your capital used if assignment were to occur)

• Diversify across names or sectors

• Avoid volatile or unstable companies

• Accept assignment as part of the process

• Prioritize consistency over peak premium

Every options strategy and trader has defined risk management rules in place so they look back for reminders or tell themselves what not to do, and the Wheel Strategy is no different. This will keep you from over trading, over leveraging, and avoid blowing up your accounts and preserving your hard earned capital. Risk management isn’t just one or two rules here and there, but its disciplined, unemotional choices.

Stick to them, and the profits will follow!

Personal Note

So I just preached about risk management, not over leveraging, and picking only stable companies. But admittedly, this is always easier said than done, and even I have to remind myself of these rules continuously! In today’s market, I’ve been caught myself with names such as NFLX and SHOP. I’m assigned these shares, selling covered calls, and am holding them while experiencing the big drawdowns, all while realizing minimal premiums and waiting for them to climb back.

So remember, assignments happen. Stocks pull back. Volatility spikes.

But the difference me now versus me 5 years ago in my trading journey is not the absence of risk, but comfort with it and this system. I trade names I truly believe in and don’t mind holding, and know that with patience and time, I will come back up on top. The structure holds because the rules hold.

What’s Next

For the the next post, we touched a bit on this, but we can get into the fun stuff: An example of position sizing and portfolio construction.

• How many tickers can you realistically run?

• How to diversify intelligently

• How to think about allocation across tickers

• And when to slow down

Today, we want to fully understand risk as step one. Designing around it is step two.

Thanks for reading folks! Until next time.

-HL Financial Strategies

Up to this point in the series, we’ve covered:

• What stocks and options actually are

• The difference between buying and selling options

• How the Wheel Strategy works step by step

• Dove into some examples

Now here’s the other important part of the strategy — and what most people always ask:

How much capital this actually requires.

And what kind of returns are realistic.

Because this is where expectations either become grounded… or dangerous.

The First Reality: The Wheel Is Capital Intensive

I won’t sugar coat this for everyone, but put simply — the Wheel Strategy is built on selling cash-secured puts. And that means you must have enough capital to buy 100 shares of the stock if you are assigned.

So yes — it is capital intensive.

If a stock trades at $100 per share, one contract requires:

$100 × 100 shares = $10,000

That capital is reserved while the put is open. This is why smaller accounts often struggle with the Wheel.

You don’t need hundreds of thousands of dollars to start — but you do need enough to:

• Run at least one full cycle

• Avoid concentrating your entire account in a single position

• Withstand normal market volatility

What Happens With Smaller Accounts

If you’re working with $5,000–$10,000:

• You’re limited to lower-priced stocks (and this becomes important)

• Diversification becomes difficult

• One assignment can tie up most of your capital

• Premium collected may feel small relative to effort

This is where many beginners get tempted.

Lower-priced stocks often come with higher volatility. And higher volatility often comes with higher premium.

That sounds attractive — but higher premium exists for a reason.

It reflects higher risk.

A stock that moves 8–10% in a week can just as easily move 20–30% in a month. If you’re assigned on something unstable, you may find yourself holding shares you never truly wanted to own.

The Wheel only works as intended when you’re comfortable owning the stock.

This doesn’t mean smaller accounts can’t do it — it just means stock selection becomes even more important.

The Wheel scales beautifully with capital. It’s slower and more constrained at the beginning. And that’s normal.

The Second Reality: Premium Is Income, Not a Jackpot

When people first see options premium, they often focus on the dollar amount.

But what matters is percentage return relative to capital at risk.

For example:

• $250 premium on $10,000 reserved capital

  = 2.5% for that cycle

That’s actually really good returns! It’s attractive. A good rule of thumb is to earn 1–3% of your capital per month.

But here’s the key:

You won’t collect 2–3% on a single position every week — sometimes not even every month.

You can’t and won’t avoid assignments forever. Even the best stocks eventually get tested. Markets won’t always cooperate.

Premium fluctuates with:

• Volatility

• Time to expiration

• Stock movement

• Overall market conditions

Consistency matters more than peak premium.

Why Chasing High Premium Is Dangerous

One of the biggest mistakes beginners make is chasing high implied volatility stocks simply because the premium looks better.

You might see:

• 4–5% potential monthly premium

• Weekly contracts paying “easy money”

• Fast-moving names that look exciting

But volatility cuts both ways.

The same volatility that inflates premium also increases:

• Assignment frequency

• Deeper drawdowns

• Emotional stress

• Opportunity cost if capital gets stuck

The goal is not to maximize premium.

The goal is to maximize durability.

A slightly lower premium on a stable, established company is often far more sustainable than a higher premium on something that can drop 30% on a headline. This also helps reduce stress and sleep better at night, and that peace of mind is worth more than a jackpot play.

The Wheel rewards discipline more than aggression.

So What Is a Realistic Return?

This is where discipline becomes important.

For most investors, running the Wheel conservatively:

• 1–3% per month on deployed capital is a realistic target range

• Some months will be higher

• Some months will be lower

• Some months may be flat

That doesn’t mean guaranteed. It just means achievable with structure and patience.

The mistake people make in the beginning is chasing:

• 5-10% per week/month

• Ultra short expirations

• High volatility stocks they wouldn’t actually want to own

Is this possible? Absolutely. But I think that goes against the main principal, and that’s no longer a conservative Wheel strategy.

A Simple Example

Let’s walk through a simplified annual scenario.

Assume:

• $20,000 deployed capital

• Average 2% monthly return on deployed capital

• Some months flat, some higher

Over 12 months:

2% × 12 months = ~24% gross on deployed capital (before taxes and adjustments)

Again, that’s not guaranteed. It won’t be perfectly linear. There will be assignments and slower cycles.

But over a long period of time, consistency compounds. And that’s the edge. 24% annual return generally beats the average return of 7-8%.

The Mental Shift

The Wheel works best when you think in terms of:

• Annual consistency

• Risk-adjusted income

• Probability over prediction

Not:

• Daily excitement

• Maximizing upside

• Perfect timing

The more boring it feels, the more likely you’re doing it correctly.

Is This Right for You?

A general check-list to see if this works for you:

• Have sufficient capital

• Prefer structure over speculation

• Are comfortable owning stocks

• Value consistency over adrenaline

• Can accept slower cycles

The Wheel may be a strong fit.

If you:

• Want maximum upside

• Have very limited capital

• Aren’t looking for share ownership during downturns

It may not be the right approach — and that’s okay. No strategy fits everyone. Again, the Wheel isn’t a “quick flip” system.

There’s a lot of great traders who can absolutely help grow small accounts with great strategies, but those never worked and resonated with me.

But, if you’re building long-term capital and want structured income layered on top — it can fit very well.

What’s Next

Now that we’ve covered who it can work great for and what is a good capital requirement for the Wheel Strategy, in the next post, we’ll dive into the other big important part of this:

What can go wrong. And believe me, things can even with the most sound strategies, and I’m currently experiencing this in today’s market conditions a bit. What to do when:

• Assignments happen during sharp downturns

• Rolling too often and aggressively

• And tackling one important myth: that the Wheel is “low risk”

I think understanding the risks is even more important than understanding the rewards because it is what makes the income durable. If you actually spend more time avoiding the risks, the rewards tend to follow.

Happy trading everyone!

-HL Financial Strategies

In the last post, we covered about an important distinction in options trading:

Buying options vs. selling options.

Buying options requires direction and timing. Selling options gets paid for probability and time.

Enter, the Wheel Strategy, which lives entirely on the selling side, and the side I live entirely on for my income generation.

In this post I’ll cover how those pieces come together in practice, and how it should be a repeatable process.

The Big Picture

At its core, the Wheel Strategy is simple:

1. Sell puts to get paid while waiting to buy a stock

2. If assigned, own the stock at a price you already accepted

3. Sell calls to generate income on those shares

4. Repeat the cycle

That’s really it. The complexity comes from execution, not the structure. There’s other rules to follow here, but I’ll get into that later. We’ll break down the structure first, then strategy later.

Step 1: Selling the Put

Everything starts with a stock you’re comfortable owning. Not a speculative ticker you hope pops. Or something you’d panic-hold. A company you’re genuinely okay owning at a lower price.

Instead of buying shares outright, you sell a put at a strike price where you’d be willing to buy.

What this does:

• You collect premium upfront

• You define your entry price

• You get paid whether the stock drops or not

If the stock stays above the strike → the option expires, you keep the premium.

If the stock drops below the strike → you buy the shares at the agreed price.

Either outcome is acceptable by design.

A Real-World Example (Put Side)

Here’s a simplified version of how this looks.

Let’s identify a stock I’d be comfortable owning and sell a put below the current price. AAPL ( ) is a great example! As of today, it is around $273. I want to own this stock at $250. I select my strike, expiration, and then sell, and execute. The premium is collected, and then that’s it.

I’m not trying to nail the bottom. Again, it’s just a strike price I’m willing to own it at, and I’m trying to get paid while I wait.

If the stock doesn’t drop:

• I keep the premium

• capital is freed

• I move on or repeat

If it does drop:

• I’m assigned shares

• my effective cost basis is reduced by the premium

• I move to the next step

This removes urgency (key point here as options are generally tied to time). There’s no rush, and no chase.

Step 2: Assignment Isn’t Failure

I think this is the part that trips people up emotionally.

Assignment feels like “losing” — but within the Wheel, assignment is just a transition.

You now own shares:

• at a price you already accepted

• with premium already collected

• with a plan for what comes next

Nothing broke. The strategy is still intact.

This is why stock selection matters so much. Quality names that can withstand bad earnings, conditions, sentiment, etc., and look to recover. In my example of AAPL, dropping to $250 is likely and it can continue to fall further. You then proceed to step 3.

Step 3: Selling the Covered Call

Once I own the shares, I sell a covered call against them.

This does two things:

• generates additional income

• defines a potential exit price

If the stock stays below the call strike:

• the call expires

• I keep the premium

• I can sell another call

If the stock rises above the strike:

• shares get called away

• I exit at a predefined price

• total profit includes all premiums collected

Again, no surprises.

A Real-World Example (Call Side)

In practice, this often looks like:

• selling calls above my cost basis

• prioritizing consistency over max upside

• being okay with shares getting called away

If shares are called:

• capital is freed

• profits are realized

• the wheel resets

There’s no attachment to the position. That’s intentional. The shares are just another way of using the capital to make money.

In the case of AAPL, the strike I choose would likely be at or a bit above $250, and then once again, the waiting game commences.

What the Wheel Is — and Isn’t

That is essentially the basics of the Wheel! It is:

• an income framework

• a probability-based approach

• a way to remove emotion from entries and exits

It is not:

• a way to maximize upside (this is the biggest psychological barrier I believe most people must overcome)

• a guarantee of profits

• something to run on stocks you don’t want to own

It works best when you accept those tradeoffs upfront.

Why This Appeals to Me

Honestly, this isn’t the most exciting or sexy trading strategy. But that’s exactly why it appeals to me. I was never one to analyze the charts, see patterns, and able to scalp or successfully identify good trades. But I do know pricing, identifying good companies, and I have an interest in the markets! This is perfect for me, and why I use this strategy.

• It’s SIMPLE

• It’s repeatable

• It scales with capital

• It aligns with how I want to manage risk

• And it performs in flat or choppy markets

What’s Next

I think in the next post, I’ll go deeper into the practical considerations:

• How much capital this actually requires

• Realistic return expectations

• Common beginner mistakes

• Why small accounts might struggle with this approach

The Wheel isn’t for everyone, and the goal isn’t to convince anyone to run the Wheel exclusively here, but it’s to give you enough clarity to decide whether it fits you or not.

Until next time!

-HL Financial Strategies

We talked about:

• What a stock actually represents

• How options are contracts tied to stocks

• The basic difference between calls and puts

• Touched a little on buying v. selling options

Now that we covered some of the groundwork, you’ll see why it matters, because without it, options can feel abstract or intimidating.

In this post, we’ll narrow the focus a bit on the key element that makes up the Wheel Strategy, the one I use almost exclusively in my trading!

Buying options vs. selling options.

On the surface, they use the same instruments. In practice, they are very different approaches.

Why Most People Start With Buying Options

Like many who are new to options, buying them is usually the first thing you encounter.

It makes sense:

• you buy a call if you think a stock will go up

• you buy a put if you think it will go down

You pay a relatively small amount upfront, and the potential upside feels large.

This is where a lot of the excitement around options comes from. I was hooked from the start! Easy money I thought, and that’s where it all went wrong. I had no structure, discipline, and was looking to get rich quick lol. Lesson learned!

The thing that makes buying options is that you have multiple factors working against you. You’re not just making a directional bet, you’re making three bets at once:

• Direction

• Magnitude

• Timing

You can be right about the company and still lose money if the move doesn’t happen fast enough or far enough!

That’s the big thing here. Even when I first started, I bought into good companies, thinking there’s no way I can lose, but because of time decay, greeks, etc., I still ended up losing. This is critical to understand.

What Changes When You Sell Options

Selling options flips this relationship, and it’s one that aligns a lot closer to how I think about stocks and the market overall.

Biggest factor when selling stocks: Instead of paying money upfront, you receive a credit for it up front. This already is a huge mind shift, as you aren’t initially using your own (hard-earned) capital to enter a trade.

Instead of needing a big move, you benefit if the stock stays within a range.

Instead of fighting time, time works in your favor.

When you sell an option, you’re getting paid for taking on a defined obligation — not for predicting a specific outcome.

That shift changes everything:

• how you think about risk

• how you think about probability

• how you think about consistency

It’s less about being “right” and more about being reasonable.

Enter “The Wheel Strategy”

The Wheel Strategy exists entirely on the selling side of options.

It combines:

• selling puts to potentially buy stock at a price you’re comfortable with

• owning shares if assigned

• selling calls to generate income on those shares

At no point does it require you to predict short-term price moves.

What it does require is:

• patience

• discipline

• and a willingness to be boring

That’s why it tends to work best for people who care more about repeatable income than adrenaline.

Why This Matters Before We Go Further

Before we talk about:

• the Wheel step by step

• capital requirements

• or realistic returns

You need to be clear on this mental model:

Buying options = paying for possibility

Selling options = getting paid for probability

If that distinction isn’t solid, the strategy won’t make sense — and it won’t feel comfortable to execute.

What’s Next

I’ll go ahead and stop here for now but for the next post I’ll walk through the Wheel Strategy itself:

• How selling puts works in practice

• What assignment actually means

• How covered calls fit in

• How the cycle repeats

I’ll go through some real world trades and examples that I’m currently in and how I’ve gone through the whole cycle, and how none of the steps really mean failure.

Thanks for reading!

-HL Financial Strategies

Before we talk about strategies, trades, or returns, we need to at step one: Stocks!

This might feel obvious — but a lot of confusion around options comes from never fully understanding what a stock actually represents. If that foundation is shaky, everything built on top of it will feel more complicated than it needs to be.

What a Stock Really Is

When you buy a stock, you’re buying ownership in a company.

That ownership comes with two simple realities:

• the value of your shares can go up or down

• the company may (or may not) generate cash for you through growth, dividends, or buybacks

When someone says they’re bullish on a stock, what they’re really saying is:

“I believe this company will be worth more in the future than it is today.”

That belief is what drives stock prices over time.

The Limitations of Only Owning Stocks

Owning stocks works well over the long term. Everyone should own stocks! Historically, the annual return on stocks over time is 8%, so of course it is highly recommended to invest in the market, and stay invested! With that said, it does have constraints:

• You only make money if price goes up

• Flat markets feel unproductive, volatile markets feel scary

• You tie up all of your capital into the stock and market, so even if you’ve made money, it’s not realized until you sell, which you don’t want to do!

Ownership of a great company is great, but ownership alone doesn’t give you flexibility. And that’s where options come in.

What Options Actually Are (In Simple Terms)

Options exist because stocks exist.

An option is a contract tied to a specific stock. It answers one of two questions:

• At what price can I buy this stock?

• At what price can I sell this stock?

And it answers that question for a limited period of time.

Options don’t float around independently. Every option is tied to an underlying stock and expires on a set date.

The Two Types of Options

There are only two basic types:

Call Options

A call option gives the right to buy a stock at a specific price (called the strike price) before a certain date.

Calls are about upside.

Put Options

A put option gives the right to sell a stock at a specific price before a certain date.

Puts are about downside protection or downside bets.

Every option is one of these two.

Buying Options: Direction and Timing

Most people are introduced to options by buying them.

When you buy an option:

• you pay money upfront

• you need the stock to move in the right direction

• and you need it to move in time

If the stock doesn’t move enough — even if your long-term view is right — the option can lose value or expire worthless.

This is why buying options often feels frustrating for beginners:

• you can be “right” and still lose money

• time is always working against you

Buying options isn’t wrong. It’s just hard to do consistently.

Those that do it, hats off to them. You can absolutely be successful buying options, and the risk-reward ratio might be more comfortable for them. Do what brings you success. I just wasn’t doing good at it myself, so I had to find a strategy that worked for me.

Selling Options: The Side Most People Don’t Know About

When you sell an option, you’re on the other side of the contract.

Instead of paying upfront, you:

• collect premium immediately

• benefit from time passing

• and don’t need a dramatic move to be right

Selling options shifts the focus from prediction to probability.

Rather than needing something to happen, you’re getting paid for what doesn’t happen.

This is the side of options that I’ve talked about here, and I focus on almost exclusively. It’s the foundation of the Wheel Strategy, and after I discovered this side, it’s hard to go back!

How Selling Options Connects Back to Stocks

Here’s the mental shift that has helped me be successful and how buying stocks and trading options really go hand-in-hand:

Selling options isn’t separate from owning stocks — it’s an extension of it.

• Selling puts is a way to get paid while waiting to buy a stock

• Selling calls is a way to get paid while holding a stock

This combines fundamentals with structure and income! This also removes the prediction out of it, since you now (in a way) mentally don’t care which direction the market goes.

Why This Foundation Matters

Options aren’t inherently risky or complicated. They’re just tools. Used carelessly, they magnify mistakes. Used deliberately, they create flexibility and income.

Before we talk about strategies, capital, or returns, this distinction matters more than anything else:

• buying options means paying for possibility

• selling options means getting paid for probability

From here, we build on the foundation was come to be known as the Wheel Strategy.

What’s Next

In the next post, I’ll walk through how these pieces come together in the Wheel Strategy. Again, this concept isn’t new, but it’s one that is not often used! The strategy consists of:

• selling puts

• owning shares

• selling calls

• and repeating the process with intention

Until the next post! Cheers.

-HL Financial Strategies

Over the past year, I’ve shared a lot about how I generate income using options, specifically through a disciplined Wheel Strategy. I’ve written about returns, risk management, capital allocation, mindset, and what it looks like to run this like a real business. I’ve shared this with audience members online as well as colleagues, friends, and family, and I’ve realized one thing, this might be completely new to a lot of you! A lot of you may also be finding this blog mid-journey. Some questions I’ve received:

• “How are you executing your strategy exactly?”

• “Where do I start similar to you?”

• “What are options? What’s the difference between a put and call?”

• “Are you just day trading?”

All fair questions! Most of my posts assume a baseline understanding of stocks, trading, and options. That works well if you’ve been around markets for a while — but it can feel overwhelming if you’re just starting or coming from traditional investing.

So the idea about starting a complete beginner series came to mind! When to better start than at the start of the new year!

Current Market Update

With two weeks into the new year, the market that feels both familiar and uneasy at the same time.

AI continues to dominate headlines, valuations, and capital flows. Expectations are high, positioning is crowded, and even good news now has to clear a higher bar. That alone increases volatility, regardless of whether the long-term story plays out.

At the same time, tariffs and trade policy are back in focus, reintroducing uncertainty around costs, margins, and inflation — even before anything materially changes.

And politics is very much back in the picture. Between renewed global posturing and increasingly aggressive rhetoric — including headlines around Donald Trump and renewed discussion of U.S. influence over places like Greenland — markets are being reminded that geopolitics can shift sentiment quickly, often without warning.

The one thing that always holds true, headlines do move markets, uncertainty raises volatility, and volatility changes how risk is priced.

And this is exactly why I focus on defined risk and repeatable income structure rather than trading predictions. When narratives get louder, structure matters more.

Why I’m Starting a Beginner Series

Simply: I want everyone to succeed! All of this uncertainty, headlines, and uneasiness used to get to me, but now with the Wheel structure and selling options, I no longer fear the uncertainty. In fact, I welcome it, knowing that it can provide more opportunity!

You also don’t need to be an expert trader to use options responsibly. But, for a lot of us, there is a tuition you have to pay, and that can be expensive. I for sure have, and even afterwards, some never find the success they are searching for. With the right structure, hopefully I can help someone avoid my mistakes.

Most people’s exposure to options comes from:

• screenshots of massive wins

• TikTok-style “strategies”

• or warnings that options are basically gambling

None of that is helpful.

So I’m starting a beginner-focused series that explains:

• what options actually are

• how I use them

• what I don’t do

• and who this approach is (and isn’t) for

This won’t be theory-heavy or academic. This won’t even be new information, but hopefully I can share it in a way that’s relatable, understandable, and it’ll be grounded in real trades, real numbers, and real constraints — the same way I run my own account.

If you’re experienced, this series will still be useful as a refresher or something you can share with friends who keep asking, “How does this work?”

If you’re new, this will give you a clean on-ramp without trying to sell you anything or rush you into trades you don’t understand.

Wrapping Up

So that’s the plan for 2026 and hoping it provides some clarity and insight!

None of this came quickly for me. It took years of trial, expensive mistakes, and learning the hard way that consistency matters more than anything. If these posts can help shorten that learning curve for someone else, it’s worth going back to the basics.

Thanks for being here! I’m looking forward to sharing the next set of posts with you and starting the year off right.

Here’s to a great 2026!

-HL Financial Strategies

• The Fed signaling expected rate cuts but future cuts still uncertain

• Consolidation rumors across media giants, including Netflix exploring a Warner Bros acquisition

• Tech whipping between euphoria and exhaustion

• Inflation cooling in waves rather than straight lines, government shutdowns, and up and down job reports

How do you even trade in this market? Should you? It goes to show you, 2025 wasn’t a year defined by prediction. It was a year defined by discipline.

It rewarded those who stayed calm, followed a process, and ignored the noise trying to pull them off their plan.

1. 2025: A Year Where Noise Was Louder Than Facts

Every week seemed to bring a new dramatic narrative:

• “AI bubble! AI supercycle!”

• “Soft landing!” → “No landing!” → “Hard landing!”

• “Tech is done!” → “Tech is back!”

And sprinkled throughout were the headline-grabbing stories:

• Tariffs on-and-off again

• Fed pivot mania

• Analysts guessing every possible policy path

But investors who chased headlines got tossed around.

At the end of the day:

Headlines don’t build wealth. Habits do.

2. Income Traders With Rules Had Their Best Year Yet

This year, I ran a structured income strategy which I talk about throughout — CSPs, covered calls, Wheel Strategy — and I had a strong year. My best year yet as a matter of fact!

And its not because markets were easy. But because I finally stayed discipline and implemented strict rules, rules which outperformed predictions.

The 2025 playbook that rewarded me:

• Taking 20–30% profits early and often

• Rolling intelligently and disciplined DCA’ing (dollar-cost averaging)

• Staying selective with tickers

• Picking high-quality businesses

• Avoiding FOMO entries

• Respecting risk before premium

I often fall back to familiar traps. Over-sizing because I believe it’ll go up. Tickers mooning so I gotta jump in now before I miss out! But I always have to remind myself: Consistency wins. Thrill-seeking loses.

3. The Biggest Lesson of 2025: Stop Asking “What’s Next?”

I speak to colleagues about trading all the time and I see this a lot:

“What’s the next big ticker?”

“Where’s the best premium?”

“Which stock is going to run next?”

It’s totally normal to think this way — but it’s also a trap.

That mindset leads to:

• Trading names you don’t actually follow

• Guessing instead of analyzing

• Overreacting to IV spikes

• Entering positions you can’t manage confidently

• FOMO-driven mistakes that compound quickly

In contrast, my own trading this year was built on something simple:

Stick with the businesses you understand.

Trade the names you know.

Be consistent, not clever.

Sure, I missed home runs in other tickers.

But the trades I did take?

Consistently profitable because I understood every setup, the behavior, the range, and the risk.

Remember, long-term success isn’t about catching everything. It’s about catching the right things, repeatedly.

4. What 2025 Reinforced for Me (and Hopefully for You)

A few truths stood out clearly this year:

✔ The best trades come from familiarity, not novelty.

Knowing how a stock moves is an edge. Use it.

✔ Boring, repeatable setups compound better than hype.

Predictable liquidity > unpredictable volatility.

✔ Income trading is a marathon, not a sprint.

1–3% monthly beats the person trying for 10% monthly… who blows up.

✔ Assignments aren’t failures.

They’re part of the Wheel. Manage them, don’t fear them.

✔ Discipline beats intelligence.

The smartest investors still lose money when they trade emotionally.

5. Going Into 2026: Keepin’ It Simple

If 2025 proved anything, it’s this:

You don’t need more tickers, more trades, more IV, or more predictions.

You just need more consistency.

My (continued) mindset for 2026:

• Stick to the names I know

• Avoid unnecessary complexity

• Respect risk first (size each trade respectfully), premium second

• Let the system work without forcing trades

• Capture income slowly and steadily

• Double down on discipline, not excitement

I stuck to this plan and plan on sticking to this from here on out, and I don’t even pay attention to the dollar amount, just the percentage targets. Whether its $200 or $2000, 20% is 20%. Doing this, I noticed the profits just stack. Do this repeatedly and success will follow!

Final Thought for 2025

As 2025 comes to a close, I’m grateful for everything this year brought — the uncertainty, the breakthroughs, and the sense of stability that came from building a plan I truly believe in. It’s been an exciting chapter both personally and professionally.

If there’s one lesson I’m taking with me, it’s this:

Stay disciplined. Stay intentional. Keep things repeatable. Remove emotion.

Do that consistently, and the results will take care of themselves.

Thank you to everyone who followed along this year. This whole project only began off a random thought I had earlier this year, and the support and interest have meant more than you know. If anything I’ve shared helped you in even the smallest way, then this has all been worth it.

Wishing you a calm, focused, and profitable year ahead!

Regards

HL Financial Strategies

Welcome to the final stretch of 2025. We’re now a month into Q4, and as always, autumn seems to bring a fresh round of uncertainty.

Once again, volatility is at the forefront of investors’ minds — this time fueled by the hangover from rate cuts that came faster than expected, a tug-of-war between inflation data and growth worries, persistent questions over whether the AI boom is sustainable, and another wave of China tariff headlines shaking tech names.

Earnings season hasn’t helped either. AI darlings are swinging ten percent in a day, while the rest of the market just drifts sideways.

But as all of this noise continues to rattle headlines and sentiment, I’ll say what I’ve said since the early days of HL Financial Strategies:

Volatility isn’t chaos anymore — it’s just background noise.

And that’s where discipline either compounds or collapses.

The Seduction of Pessimism

Recently, a colleague recommended that I read The Psychology of Money by Morgan Housel. While I haven’t gotten around to it yet, I’m familiar with many of its core ideas — and one quote in particular stuck with me:

“Pessimism is the easiest way to sound smart.”

That line has aged perfectly. Every chart online these days seems to forecast either an imminent crash or a euphoric melt-up. There’s rarely any middle ground.

Pessimism sells because it feels analytical — especially when markets are hovering near all-time highs. It’s easy to stir up fear, because surely it can’t just keep going up, right?

“The Fed’s cutting too fast.”

“China’s slowdown means recession.”

“AI’s a bubble.”

The narratives keep changing, but the tone rarely does: fear disguised as insight.

And that’s what’s been on my mind lately. Beneath all the analysis, technical charts, predictions, and market commentary lies a much simpler truth — money is emotional before it’s mathematical.

Tell me if this sounds familiar — because it’s happened to me more times than I’d like to admit:

You do everything right. You research the fundamentals, study the charts, spot the pattern clear as day… then exit too early, take a small loss, and watch the trade play out exactly as you expected. The move happens right after you’re out. So, frustrated, you jump back in — only for it to reverse again and lose even more.

That’s not a lack of skill. That’s emotion hijacking execution.

Reasonable Beats Rational

In theory, the rational move this quarter might’ve been to hedge everything — buy puts, sell premium, sit in cash.

But the reasonable move, at least for me, was to keep following the plan.

And that plan just delivered my two best trading months ever.

No new strategy, no over-optimization. Just patience. The same Wheel framework, tighter risk control, smaller position sizes, wider strikes, and a clear reminder that I’m not here to impress the market — I’m here to survive it.

When I focused less on being “right” and more on being consistent, the results spoke for themselves.

That’s exactly what Housel meant: the best investors don’t aim to be rational — they aim to be reasonable enough to stay in the game.

When Volatility Returns

Rate cuts or not, the market’s message is the same: control what you can, and ignore what you can’t.

Here’s what’s been working for me lately:

• Size reasonably. Even when it’s tempting, stick to your rules. Don’t over-leverage. Risk tolerance is everything — no matter how confident you feel about a setup.

• Give yourself time. Widen your strikes. Push out expiration dates. Let your trades breathe instead of forcing them to work on your schedule.

• Always secure profits. Big or small, follow your plan. If your rule is to take profits at 20–25%, do it — even if the trade later runs 40%+. Consistency beats perfection. Hitting singles and doubles will always win more games than swinging for home runs every at-bat.

• Hold cash. Give yourself the option to “load up” when real opportunity appears. Optionality is underrated — and often the most powerful position you can have.

Simple. Boring. Repeatable.

And quietly effective.

Freedom Is the Ultimate Dividend

There’s a line from The Psychology of Money I keep coming back to:

“Wealth is not about having more money. It’s about having more control over your time.”

That idea has shaped my message since the very beginning of HL Financial Strategies.

As I prepare for the next chapter of my life, I feel more confident than ever that freedom isn’t about yachts or Lambos — it’s a mindset built on stability. And that stability comes from a trading discipline that’s given me something far more valuable than status: the ability to no longer rely on a corporate job that was quietly taking away my time and peace.

The past two months were proof of that. Calm execution in a noisy market doesn’t just grow capital — it builds confidence and clarity.

Stay safe out there, friends. Enjoy the rest of 2025, and best of luck to all.

The answer, as always, is more complicated than a simple yes or no. Markets love certainty, but right now we’re swimming in mixed signals. On one hand, history tells us that strong Septembers often carry into a year-end rally. On the other, there are plenty of signs flashing overbought and stretched. The question for investors isn’t just “Are we bullish or bearish?” — it’s how do we position ourselves when it’s probably both?

The Bullish Case 📈

• Fed rate cuts inject liquidity and ease financial conditions. Historically, this is fuel for equities.

• September strength: When September is green, the probability of a year-end rally rises sharply.

• Big bank sentiment: Goldman just upgraded global equities to “overweight,” a clear signal of optimism from institutional desks.

• Momentum trades: Robinhood, freshly added to the S&P 500, has become the index’s top winner of 2025 — a symbol of the kind of explosive momentum that can extend rallies.

On paper, this looks like the start of something powerful. Add in seasonal tailwinds (the so-called “Santa Rally”) and you can make a strong case that markets have room to run.

The Case for Caution ⚠️

• Yields remain high: Elevated Treasury yields raise financing costs and put pressure on valuations, especially in AI and growth names.

• Bubble chatter: Investor surveys show bubble worries climbing, though not yet extreme.

• Recent pullback: The September rally finally stumbled last week, with the S&P, Dow, and Nasdaq posting back-to-back declines.

• Technical signals: RSI levels on names like $NVDA, $TSLA, and $AAPL are flirting with overbought zones.

This isn’t a market where you want to blindly chase. The cracks are small for now, but they’re there.

Read more

The Fed is widely expected to cut rates next week. Inflation has cooled in some areas, but long-term bond yields are still volatile, and debt issuance is spiking. For most investors, this feels like noise. For traders, these shifts directly impact the bread and butter of our strategy: option premiums.

But beyond the trade mechanics, this environment also raises a bigger question: where should our capital live? Is it better locked away for later, or working today in accounts that give us liquidity, flexibility, and control?

What This Means for the Wheel Strategy

When rates fall, volatility often compresses. That means smaller premiums, tighter ranges, and a tougher grind to extract the same income we saw during peak volatility.

The temptation is clear:

• Sell further OTM strikes with lower deltas to keep “safe.”

• Or, worse, size up capital to “make up” for the lower income.

Both are traps. The real edge of the Wheel is discipline. Whether premiums are rich or thin, the north star remains 1–3% monthly returns on capital. That’s enough to compound into something life-changing, without stretching into risk you don’t need.

This is why I’m staying the course — quality tickers, transparent risk, repeatable process. Rate cuts don’t change the fundamentals.

Why Current Events Do Have Me Rethinking Allocation

Here’s the bigger reflection: rate cuts and shifting yields force me to reconsider where my capital works hardest.

Traditionally, the guidance is straightforward: max out your 401k (or whatever retirement account you have access to), take the tax deduction, and let compounding work for decades. Simple enough right? That is a solid plan — but it comes with a catch: most of that money is locked until you’re 59½. So the question becomes: what funds do you live on before then?

If your standard brokerage account can generate 1–3% monthly returns through active strategies like the Wheel, the equation shifts. In that context, over-contributing to a tax-deferred account can actually be less efficient if it:

• Locks up capital I could otherwise use to generate accessible monthly income.

• Reduces flexibility (especially for anyone targeting FIRE before traditional retirement age).

• Creates a mismatch between short-term lifestyle needs and long-term growth.

I’m not saying ignore the 401k — most employees offer a match and that match is still free money. And tax-advantaged compounding has its place. But blindly maxing it out “because that’s the rule” no longer makes sense if I can put that money to work in a liquid account today.

A Simple Example: $23,500 in 401k vs. Brokerage

Suppose you contribute the maximum annual $23,500 (in 2025) into a 401k:

• 401k: Invested in an S&P 500 index, you might average ~7% annually. After 1 year, that’s ~$25,145. Of course, the catch is: funds are locked until ~59½ unless you take penalties.

• Brokerage (Wheel Strategy): Assuming we are executing the Wheel Strategy as I’ve talked about here and targeting 1–3% monthly, even at the conservative end (1%), you’d generate ~$235/month, or ~$2,820 over the year — and it’s accessible now as cash flow. At the higher end (3%), that’s ~$8,460/year!

The takeaway: the 401k growth is much safer for later, and again, it should definitely be a tool that you take full advantage of, but the brokerage grows and pays you today. The goal isn’t to abandon one for the other — it’s to balance both so you have enough for later AND enough for now.

What I am doing: I didn’t stop contributing to my 401k, but I did stop after I hit my full company match (I’m still working at my W2 corporate job). I now direct those funds I would have likely contributed over to my brokerage account, where I can compound my capital to continue to earn premium income!

Other Strategies Worth Considering in This Environment

Rate cuts and volatility shifts also open doors for complementary strategies:

• Dividend ETFs (SCHD, O, etc.): Lower rates can re-ignite dividend stocks as yield alternatives.

• Short-duration bonds / T-Bills: Still worth holding for safe liquidity.

• Barbell approach: Keep compounding in your trading account while funneling excess into long-term assets like VOO or even BTC for asymmetric upside.

The key is balance. Instead of automatically maxing every account, the smarter question is: Which bucket gives the best mix of return, flexibility, and tax efficiency given my FIRE timeline?

Closing: Liquidity as an Edge

Markets are bracing for the Fed. Yields are swinging. Investors are stretching for yield in private credit, bank stocks, and opaque corners of the market.

For me, the takeaway is simpler:

• Stick to the Wheel playbook.

• Re-evaluate allocations with flexibility in mind.

• Keep a healthy balance between locked-up retirement funds and liquid trading capital.

Because at the end of the day, liquidity is what creates freedom. Retirement accounts are valuable, but they’re locked away for the future. The real edge is having capital you can access now — capital that generates income today, adapts when conditions shift, and moves you closer to FIRE without depending on the 9-to-5.

If your paycheck stopped tomorrow, would you be okay — or are all your dollars already spoken for?

Too often, even high earners fall into a cycle where every raise is matched by higher expenses. Bigger house. Newer car. More subscriptions. More splurges. Before long, there’s no breathing room.

And here’s the catch: sometimes it’s not even “bad” spending. It’s paying down your mortgage aggressively, paying cash for a new car, or sinking money into a big one-time purchase. Those moves might feel responsible — but if they drain your liquidity, they can leave you just as vulnerable as reckless spending would.

The Goal Isn’t Just to Earn — It’s to Be

Untouchable

When I talk about financial independence, I’m not just talking about retiring early.

I’m talking about building a foundation so strong that if you:

• Quit tomorrow

• Got fired without warning

• Decided to take a year off

…you’d be okay. Bills paid. Life intact. Stress levels low.

That’s when you truly own your time. That’s when you’re free.

Remember: Work Isn’t Loyal

It’s easy to think a company will “take care of us” after years of loyalty. But the reality is:

• Corporations are built to protect profits, not your mortgage.

• Your employer won’t lose sleep if you can’t pay your bills after a layoff.

• The paycheck stops the moment they no longer need you.

That’s why you should never depend on work to be your safety net. Be thankful for the paycheck — but treat it as a tool to build independence, not a lifeline to cling to.

When you use today’s income to fund tomorrow’s freedom, you flip the script: your job becomes optional, not essential.

The Foundation That Makes It Possible

1. Emergency Fund First – At least 6 months of essential expenses, sitting in a high-yield savings account. This is your shock absorber when life hits you sideways. And yes — this cash matters more than rushing to pay off “good” debt or making big cash purchases. Liquidity keeps you alive in a crisis.

2. Live Below Your Means (for real) – There’s an old “50/30/20” rule that suggests 50% of income goes to needs, 30% to wants, and 20% to savings.

   That’s a fine starting point — but if you want real freedom, here’s the better play:

   • Cap your needs at a fixed dollar amount instead of a percentage.

   • As income grows, keep those needs flat and push the extra into savings and investing.

     This forces lifestyle inflation to slow down and accelerates your independence.

3. Separate Needs and Wants – Needs keep you afloat. Wants are optional. Fund your needs and savings before you even think about splurges — or even those “smart” cash decisions that tie up money you might need later.

Your Freedom Check

So here’s your test:

If your paycheck stopped tomorrow, how long could you cover your life without panic?

• Less than 3 months? That’s your warning sign.

• 6+ months? You’re starting to build resilience.

• A year or more? You’re truly in control.

And don’t forget: sometimes the “right” move isn’t the smart move. Paying down a house or dropping cash on a car may feel good — but if it leaves you with no emergency fund, you’re still at risk. Liquidity buys you time. Time buys you options. Options buy you freedom.

Because freedom isn’t bought with a title, a salary, or a promotion — it’s built with discipline, planning, and the choice to keep your lifestyle under your control.

And I’ll add this personally: I’m grateful for my paycheck and for the opportunities my career has given me. Having a well-paying job has put me in a position to build this foundation. But the whole point is to use that blessing wisely — not to depend on it forever.

And when you do that? You can step away from a job on your terms. Or if the worst happens, you can walk away without fear.

That core focus hasn’t changed — but recently, a new player caught my attention: YieldMax ETFs. What exactly are these funds? Are they just pre-packaged versions of the Wheel? And if so… should I just buy one and call it a decade?

Let’s break it down.

💡 First Off — What Are YieldMax Funds?

If you’ve come across tickers like $MSTY, $TSLY, or $APLY, you’ve probably seen the crazy yields they advertise — often in the 25–50%+ annualized range! These are part of the YieldMax ETF family, a group of actively managed funds that aim to generate high monthly income using synthetic covered call strategies on popular stocks like MicroStrategy ($MSTR), Tesla ($TSLA), and Apple ($AAPL).

Sounds a lot like the Wheel Strategy, right?

Not quite.

Yes, YieldMax funds generate income through options — just like the Wheel. But the core difference is this:

YieldMax funds don’t preserve capital. The Wheel does.

These ETFs are built to maximize monthly yield, even if it means slowly eroding the fund’s value over time (called NAV erosion). Because they cap upside, don’t own the underlying stock, and constantly roll options, their long-term performance often trends down — even as they pay out those tempting monthly dividends.

🔁 Why I’m Using YieldMax (Carefully)

I’ve started building a small, tactical position in $MSTY — but with clear intent. This isn’t a long-term hold. I’m using it strictly as a short-term yield play, harvesting high monthly income and then funneling that income directly into long-term assets like $VOO and capital for my Wheel Strategy account.

Yes, to be clear: MSTY is not replacing the Wheel Strategy. Not even close!

Why? Because the Wheel lets you manage positions on stocks I choose and believe in. That’s the beauty of the Wheel:

You control the stocks, the strikes, the timing — and ultimately, your exposure.

With YieldMax funds, you give up that control. You don’t get to pick the underlying stock. You don’t get to decide how options are rolled. You’re buying a packaged strategy with no input — and with that, you also inherit the risks of NAV erosion and capped upside.

That’s not necessarily bad — but it’s very different from what the Wheel allows you to do.

So yes, I’ll continue to use MSTY as a supplemental income source, but the foundation of my strategy — and the reason I’ve been able to validate a path to financial independence — still rests on the control and compounding that the Wheel Strategy gives me.

📊 Running the Numbers: Validating Financial Independence

Lately, I’ve been running the numbers — and the path to financial independence is no longer just theoretical. After years of trading, saving, and investing, I’m finally at a point where stepping away from the W-2 grind isn’t just possible — it’s realistic. Not decades away and maybe not even years. But soon!

This isn’t traditional FIRE in the “retire early and live frugally” sense. But it’s something similar, even better imo:

Owning my time. Living on my terms. No longer needing a paycheck to survive.

Over the past few months, I’ve been modeling different paths:

• Monthly income from the Wheel Strategy

• Layering in my paycheck, company bonsues + stock options, some real estate cash flow, and HYSA reserves

• Forecasting changes, healthcare and lifestyle expenses

I’ve done this over and over and am still in disbelief that it is still within reach. Here’s the bottom line:

Thanks to the foundation I’ve built around the Wheel, I’ve validated a real, sustainable path to early independence — one that generates income, preserves capital, and gives me complete flexibility.

It’s not about being rich. It’s about being free — and knowing that can do that on a system that lets me live life on my own terms.

🛠️ What Else I’ve Been Building

Aside from trading and planning for financial independence, I’ve been building something I’ve always wanted: a dedicated app to track my Wheel Strategy trades.

Sure, spreadsheets work — and if you’re trading, you absolutely should be tracking your positions — but I wanted more. Coming from a software engineering background, I knew I could build something better: a tool that tracks trades, calculates performance metrics, logs activity, and supports the full lifecycle of Wheel positions.

So in my spare time, I started building it. Introducing: The Wheel Trade Tracker App 🚀

It’s fully functional and currently includes:

• A clean, validated trade entry flow

• Separate tables for open vs. closed trades

• Position lifecycle tracking (including partial and full closes)

• Portfolio metrics to monitor capital usage and performance

It’s been a fun project to create from the ground up — and while it’s still a work in progress, I’ll definitely be using it for my own trades moving forward. If you’re interested in trying it out, I’d love to share it and hear your feedback.

🧭 Where This Is All Going

So that’s what I’ve been up to lately — researching YieldMax funds, modeling out early retirement, and developing the Wheel Tracker app from scratch.

But more than anything, I’ve been spending my time doing things I genuinely enjoy — on my terms, free from the pressure of a paycheck or the constraints of a corporate job.

This journey started as a way to trade more effectively. It’s become something bigger: a way to build a life around freedom, intention, and ownership of my time.

Thanks for following along!

-HL Financial Strategies

Here in the US, it’s July 4th! This means fireworks, BBQs, and plenty of sun and beach days! But for me, it also gives me a chance to pause and appreciate the freedoms we have, especially the freedom to build our future. Whether that's through investing, entrepreneurship, or just taking charge of your own path, this holiday reminds me of what I am grateful for. It’s not Thanksgiving, but it’s never too early for some reflection!

Gratitude for the Journey

This long weekend has also given me a chance to reflect, and more than anything, I’m grateful. Grateful to even be in a position to think about financial independence. To have the time and mental bandwidth to study, learn, and implement the Wheel Strategy. The strategy that allows me to take risks, test ideas, and stay in the game long enough to see results. Not everyone gets that chance, and I don’t take it for granted.

I’m grateful to have finally started my own business! I’ve been wanting to do this for awhile now, and this year, I finally took the leap. After years of experience, discipline, and a whole lot of trial and error, I’ve finally managed to find my niche, and I can now fully dive into something I truly believe in.

It’s easy to focus on where we’re going, but this weekend, I’m taking time to appreciate where I am.

What the “Big Beautiful Bill” Means for Investors

As we celebrate our nation’s independence, we’re also watching major legislative shifts take shape — most notably, the newly passed “Big Beautiful Bill.” While there’s still a lot being unpacked, early headlines suggest significant changes are coming to health care coverage, especially around expanding access to Medicaid and streamlining enrollment for low-income seniors and families.

No matter what side of the political fence you sit, from a financial standpoint, here’s what I’m watching closely:

• Increased federal spending could bring short-term market volatility, but may also stimulate key sectors.

• Healthcare and biotech stocks may benefit from the expected funding injections and expansion of coverage.

• Tax reform components in the bill — including potential credits or deductions — may change how investors approach taxable accounts or deductions tied to small businesses like mine.

As someone who’s building income through options trading and running HL Financial Strategies, I’ll be keeping a close eye on how these policies ripple through the markets and what they mean for the average investor. The more we understand the macro environment, the better decisions we can make at the micro level.

Wishing you and your families a safe, joyful, and meaningful Independence Day!

— HL Financial Strategies 🇺🇸

Wild, right?

But then I saw a stat that made me pause:
If the original $67 million spent to buy the Lakers back in 1979 had just been invested in the S&P 500…

👉 it would be worth over $13 billion today!

Let’s be clear — I know it’s not an apples-to-apples comparison. Owning a pro sports team is about more than ROI.

But still… the math says something loud:

Time in the market can outpace almost anything — even owning the Lakers.

📈 The Power of Compounding (That Most People Underestimate)

We’ve all heard it before: “Invest early, stay invested.”
But this isn’t just theory. It’s reality.

From 1979 to 2024, the S&P 500 returned an average of ~11% annually.
That kind of compounding, over 45 years, turns millions into billions.

The key?
Not perfect timing.
Not meme stocks.
Not hot tips.

Just staying in the game long enough for the math to work.

🤔 So What Does That Mean for You?

You don’t need to own a franchise.
You don’t need $67 million!

But if you:

• Invest consistently

• Stay in during the good and bad years

• Focus on long-term wealth, not short-term hype

…you’re already using the same force that turned a $67M investment into a $13B one: compound growth.

🧠 My Takeaway (And Why I Trade the Way I Do)

I’m a big believer in monthly income through options — that’s why I run the Wheel Strategy.

But my trades don’t replace investing — they support it.

I use the income I generate to:

• Fund my retirement accounts

• Reinvest into long-term holdings (like VOO, AAPL, etc.)

• Build freedom, not just profits

Because at the end of the day, trading is a tool.
But time in the market is the engine.

🏁 Final Thought

Not everyone gets to buy a basketball team.
But everyone has access to the stock market.

The earlier you start, the longer you stay in, the better the outcome.
And if you’re already in the game — keep going. The market rewards patience more than anything.

Until next time,
– HL Financial Strategies

If you haven’t heard, today, social media lit up! 🔥 I won’t go into too much details here, as I’m sure there are plenty of ways to catch up on everything, but in summary:

Elon blasted Trump. Trump fires back. Elon goes on a rant.
And then just like that — TSLA takes a major hit dropping more than 14% - a 47 pt drop - in less than half a day!

So what now? Do you have $TSLA positions?
I do. My cash-secured puts were actually conservative.
Placed at a modest strike price, low deltas, and good premiums.
My positions are 100-200% down. 😂

Just remember, stick to the plan! Even I go through the emotional roller coaster, but have to remind myself, I’m okay owning this stock at this price, even as it continues to free fall.

Don’t Trade Drama — Trade Rules

Years ago, I would’ve been all over this:

• “Buy puts?!”

• “Load up on calls, it should bounce here!”

• “Double down! Open twice the positions!”

But experience (and losses) taught me one thing:
Emotion is expensive. Structure pays.

📊 What I Did With $TSLA Today

I sat back and followed the drama on X like everyone else.

As the price started dropping and neared my strike, I took a step back and analyzed the next support level. Once it hit my target zone, I opened a new cash-secured put — collecting more premium and averaging up my cost basis.

I already had an open CSP, so I knew the delta and premium I was targeting — this time, I just got it at a better price.

What if it keeps falling and I get assigned? That’s exactly why I choose expirations 30–45 days out. It gives me time for the trade to work and helps keep emotions in check.

And if I don’t get assigned? Perfect. That’s the beauty of the Wheel — there’s always a next step.

If I do get shares, I’ll turn around and sell a covered call at or above my strike, continuing the cycle: collecting more premium while positioning for potential gains.

And if I don’t? Rinse and repeat. That’s it!

The Wheel Strategy keeps you two steps ahead — like Mahomes reading a defense or Magic running the break. Read and react, but not overreacting.

📬 Final Thought

You don’t need to guess the market.
You don’t need to choose sides in every feud.
You just need a system that works — with or without headlines.

Until next time! Have a great second half of 2025!

– HL Financial Strategies

Because when I first started trading, I was chasing every alert, every “hot play,” every chance to turn $1,000 into $10,000. $10,000 into $100,000. To be “wealthy.” And I burned out — mentally, emotionally, and sometimes financially.

As I get older, and more experienced, I now often ask myself, what does wealth really mean to me? What am I trading for? Back then, my goal was different. Now, I approach trading with clarity and purpose.

I’m not trying to beat the market.
I’m not trying to flex for the gram.
I’m just trying to generate consistent, repeatable income every month.

For me, that goal is 1–3% per month.

And I’ll tell you why that’s not just enough — it’s exactly what I’m aiming for.

💡 Why 1–3% Is the Sweet Spot

Let’s be honest — most traders on social media are chasing 10%, 20%, 100% returns in a week.
It looks exciting. But it’s not sustainable — and more often than not, it ends in blown-up accounts.

Here’s why 1–3% is where I live:

• It’s realistic. I’m not taking wild swings or YOLO’ing into earnings.

• It compounds. 1.5% per month is nearly 20% annually.

• It’s manageable. I don’t need 10 trades open. I don’t even need 10 hours a week.

• It works with my life. I still work full-time. This fits into my schedule — not the other way around.

📊 Quick Math

Let’s say I deploy $50K into a few trades:

• 1% monthly = $500/month

• 2% = $1,000/month

• 3% = $1,500/month

That’s real money. Money to pay bills. Money I didn’t have to rely on my day job to make.

At 1%, that means I can work less to cover that car payment. At 2%, maybe all my utility bills. 3% is possibly enough for rent/mortgage!

The best part? I’m not swinging for the fences to achieve this — I’m selling premium on stocks that I already want to own and doing it at a steady pace.

🔄 The Strategy That Supports It

If you’ve followed my posts, you know I use the Wheel Strategy:

1. Sell a cash-secured put on a stock I like

2. If assigned, sell a covered call

3. If called away, go back to step 1

I do this on names like (but it doesn’t need to be these stocks):

• $TSLA for high premiums

• $NVDA for active setups

• $AAPL and $GOOGL for steady, low-stress income

The beauty of the Wheel is that it doesn’t rely on prediction — just patience and discipline.

I get paid to wait.
Then I get paid again while I hold.
Then I get to start over.

😤 What Happens When You Chase More

Every time I’ve tried to do “more,” I’ve gotten less.

• I chased higher premiums and got assigned stocks I didn’t want

• I opened too many trades at once, couldn’t manage them all

• I forced trades during earnings weeks or low liquidity

And guess what? Most of my worst trades came from trying to make back a loss — not from following my plan.

That’s when I realized:
This isn’t about being aggressive. It’s about being consistent.

🎯 What 1–3% a Month Actually Supports

Let’s zoom out for a second.

What does this strategy actually do for me?

• It pays my bills

• It builds up my portfolio

• It gives me confidence

• It gives me time and freedom

And it does all of that without me having to stare at a screen all day or stress over every tick in the market.

Some months it’s 0.8%. Some months it’s 2.5%. But I’m not relying on luck. I’m relying on process.

🔚 Final Thoughts: Play the Long Game

If you’re aiming for 10% a week, you have to be right a lot.

If you’re aiming for 1–3% a month, you just have to be consistent.

The Wheel Strategy gives me a framework to do that. And more importantly, it aligns with my reason for trading in the first place:

To build income.
To build discipline.
To build something sustainable.

Ask yourself what are you doing this for? For me, it’s always been about buying back my time and using that to spend with my family. We don’t have kids yet, but I know that when we do, I’ll be able to spend that time with them because I’ve set myself up with a system that can provide for me and my family.

A few years ago, I will admit, my goal was to become rich overnight. Filthy rich! Something I can happily post on social media and sell to my followers on how you can achieve the same! Today, the goal hasn’t changed — but the definition of ‘rich’ has. It’s no longer about dollar signs, but about time, peace, and freedom.

It’s not about trying to get rich overnight — but as long as my expenses are paid for, my portfolio can grow over time, and I can rely on my day job less, in the end, to me, that is more.

Until next time,
– HL Financial Strategies

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