Wheel Strategy Simulator

The "wheel" is a cyclical options income strategy: sell a cash-secured put, and if it's assigned, sell covered calls against the resulting shares until they're called away, then go back to selling puts again. This calculator simulates that cycle over as many rounds as you choose, using a flat assumed premium percentage per cycle and a price-drift assumption to determine when each option gets assigned.

Since real option premiums depend on implied volatility at the time (something a multi-cycle forward simulation can't know in advance), this is a planning tool for the overall shape of the strategy, not a precise forecast, the same convention most wheel-strategy planning calculators use.

How does this calculator work?

Enter a starting stock price, how many contracts, how many days each cycle lasts, and how many cycles to simulate.

Set how far out of the money each strike is placed, an assumed premium percentage collected each cycle, and an assumed price drift per cycle (used only to decide whether each cycle's option ends up assigned).

For each cycle, if you're not holding shares, the simulator places a put strike below the cycle's starting price by your OTM percentage, collects the assumed premium (strike × premium % × shares), and applies the price drift to get the price at the end of the cycle.

If that end-of-cycle price falls below the put strike, the put is assigned: the simulator deducts the cost of buying 100 shares per contract at the strike, switches to holding shares, and records a cost basis (strike minus premium collected, since the premium effectively lowers what you paid).

Once holding shares, the same logic runs in reverse: a call strike is placed above the current price, premium is collected the same way, and if the drifted price ends up above that strike, the call is assigned, the shares are sold at the strike, and the simulator switches back to selling puts for the next cycle.

This repeats for every cycle you set, with cash balance and premium collected accumulating along the way. The final total value is whatever cash is on hand plus the market value of any shares still held at the end of the last cycle.

The Monte Carlo tab runs this same cycle-by-cycle logic hundreds of times instead of once, replacing the single deterministic price drift with a random price move each cycle, sized by the volatility you enter. Your assumed drift stays the mean of that randomness, but each simulated run can land above or below it, the same way a real underlying doesn't move in a straight line even when it trends in one general direction. The result is a range of outcomes (a 10th-to-90th percentile band) instead of one single number.

For a broker's overview of the strategy this simulates, see Charles Schwab's wheel strategy primer or OptionsPlay's explainer.

Worked example

A $100 stock, 1 contract, 30-day cycles for 12 cycles, 5% out-of-the-money strikes, a 2% assumed premium per cycle, and a 0.5% assumed price drift per cycle.

Total premium collected

Sum across all 12 cycles

Ending position

Holding shares or in cash, depending on the final cycle's assignment

Total value

Cash balance plus any held shares, at the final simulated price

How the numbers work

Each cycle collects a premium (2% of that cycle's strike here), whether or not the option ends up assigned, since the premium is paid up front regardless of the outcome.

Whether a given cycle's put or call gets assigned depends entirely on the assumed price drift versus the strike distance: a put assigned means the stock drifted below the put strike; a call assigned means it drifted above the call strike.

The wheel's income comes from repeatedly collecting premium, but the simulation also shows the real trade-off: a sustained downward drift means holding shares through some cycles at a falling cost basis, while a sustained upward drift means repeatedly getting called away and re-entering with cash-secured puts, missing further upside beyond each call strike.