Was curious about any feedback of LCID as a wheel for smaller accounts or in general.
Currently trading at about $34/$35 - Shouldn’t be too difficult to get earn $75 - $100 a week per covered call selling at strikes $5 - $6 OTM.
Investment $3500 Monthly return $400 (11.43%) -
I like this idea. Even better as it’s currently trading now at $30 compared your post a few hours ago. Could buy $3,000 and start selling the $32c for next weeks expiration which is currently at a premium of $1.56. GL! Let us know how this goes!
Will do - waiting it out to see if it dips again that $29 entry would of been nice
I’ve wheeled LCID for quite a while. It’s been one of the better ones, just know that you will get blown out from time to time.
Start with the short put leg first until it shows some kind of bottom.
^+1 to that. i would target a $25 strike for CSP based on the levels it was hovering at in sept/oct
I like this small-account wheeling idea. I’ve tried it before but my account was maybe too small and the premiums just weren’t worth it.
Makes sense, maybe a $25 / $27 Feb 4th?
I did this with IPOF but hated how far spaced the OPEX dates for this were. It was good in December when there were little pops of it based on rumors. Premiums would get juiced, & I’d sell to open that position.
What about running a PMCC (if you’re allowed to with your account)?
PMCC has the same effect but if you get assigned on the short call, you’d have to get rid of your long call which will be subjected to whatever the spread at that time, which is kind of wide if you have a leaps.
But functionally they work the same way, if your broker allows it.
pmcc is more capital efficient
At what point does PLTR become cheap enough for the wheel or PMCC? $12 seemed to be some short term support this week. It had always been on my radar, but never got around to it (probably a good thing seeing as it’s had a major haircut recently).
It’s not so much about becoming ‘cheap enough’ but more about what kind of premiums you can get on the stock. There is nothing wrong with it if you’re happy with the return. I look at it from the perspective of ‘how many months i need to sell to recover my entire cost basis’, so PLTR wouldn’t make it on the list since there are plenty of others that are better.
Does legging strikes with higher volume help mitigate the risk you talked about re: PMCC
Also you should rename the thread if you can with LCID in the title 
Can you elaborate and what your thought process is when choosing sticks to wheel?
So, I’m responding from the perspective of a trader that began my trading journey with the wheel, and as mentioned in the title it can be used by small accounts well, and can easily be scaled up as the account grows and you get ‘multiple wheels’ rolling.
That said, LCID is definitely a good contender — it has a fairly liquid options chain & it’s not hard to get a fill, and between the bursts of movement up & down on this stock, especially when ‘hot sector’ attention is spotlighting EVs, the IV% contraction & expansion make it really nice to sell calls against, or covered ratio spreads for example to get 2-calls written against 100 shares, w/ +1 buy of an OTM long call.
Since OP was asking specifically about a ticker for a small account, depending on what you are working with — the amount of capital you’re looking to deploy in this venture, and/or the % of your account you’re okay with having in one ‘wheel’ recent earnings has brought a ticker I was previously short on ($HOOD) down to prices around the $10 level, even breaking below in the premarket on Friday 1/28.
The premiums on that stock for weekly expiry’s are pretty nice for the ‘premium : Cost for 100 shares’. Regardless of the complaints some have against the company, based on technicals this stock is pretty oversold, and bounced hard off of that $10 level up to around $12.5. I was able to sell a call for 2/4 on Friday’s session for 1.54 in premium; w/ ~$1000 investment for the shares in total. It’s definitely one to consider as it can be difficult to find a stock that is that cheap that has weekly options, a liquid chain, & also nice swings in IV expansion/contraction which gives a lot of opportunities to sell calls when IV expands and is inflated, then buy them back for profit on contraction/theta decay/underlying dips.
Personally I use more ratio call calendar spreads (which is one of my go-to starter position strats when I want a net long position in something), or PMCCs as I’ve become more comfortable with running spreads than actually holding share positions in the current market conditions, but with that said HOOD was so cheap w/ inflated premiums that I had to start a wheel on it this week. I picked them up for $10 to start it off. Lucid is one I’ve also sold calls against in the past, and when it dipped to 26 on Friday I was considering picking some up and plan to next week.
Hope that helps!
For those who signed up on webull and are in cash accounts is this a viable option? As soon as you’re assigned, if you are, would that affect the rules of the cash account and put the account back in the PDT/good faith realm? I know a lot of community members use cash accounts for options trades so it would be good to clarify before someone uses this strategy and causes trading limitations on the account.
Great example either way, thank you for sharing with everyone!