DEVELOPMENT OF THE WHEEL STRATEGY OPTIONAL STRATEGY IN THE STOCK MARKET

Abstract

The article explores the theoretical and practical aspects of implementing «The Wheel Strategy» in the modern stock market. It is established that the Wheel strategy is one of the most popular options strategies, allowing investors to generate regular income through premiums. The study presents a procedural mechanism for the sequential implementation of the Wheel strategy through a two-phase process that integrates the selling of Covered Calls and Cash-Secured Puts.
Recommendations are provided for implementing the Wheel strategy into the investment activities of Ukrainian investors to minimize risks and optimize capital management. The advantages and risks of this options strategy are identified. It is determined that the primary markers of the Wheel strategy include: thorough stock selection; proper adaptation to current market realities; understanding capital formation nuances and risks; and the skillful selection of strike prices. The implementation of the Wheel strategy by Ukrainian traders is analyzed, taking into account the regulatory restrictions of the domestic financial market and the specifics of accessing international exchanges (registration with a reliable international broker; use of international payment systems or intermediaries for account funding due to current National Bank of Ukraine restrictions on direct SWIFT transfers abroad for investment purposes; and selecting underlying assets suitable for the systematic selling of Put and Call options within the Wheel strategy framework).
It is substantiated that the effectiveness of the strategy in question contributes not only to capital growth but also to the formation of investment discipline, protecting investors, particularly beginners, from emotional decisions that often lead to losses in speculative markets. It is proven that one of the most pressing challenges for the successful execution of the strategy remains finding the ideal balance between the premium received and the assignment risk (selection of strike price and expiration date), as well as the necessity for a rigorous selection of highly liquid and fundamentally sound assets.