HL Financial Strategies 101: Buying vs. Selling Options — and Why the Difference Matters
Part 2 of my Beginner Series!
Hey everyone! Welcome back! In the last post, we took it all the way back to the basics.
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