Wheel Strategy Return Calculator
Track the income from running the wheel — total option premium collected against the cash secured, as a period return and an annualized yield.
How it works
Cash secured = strike × 100 × contracts · Income = premium × 100 × contracts · Cycle return = income ÷ cash · Annualized = cycle return × 365 ÷ days
The wheel is an income strategy: you sell a cash-secured put, and if assigned you own the shares and sell covered calls against them until they are called away, then start over. Its return is driven by the total premium you collect measured against the capital you must keep secured. This tool sums the premium across a full cycle and annualizes it; it does not include share price gains or losses, which can dominate the outcome if the stock moves sharply against you.
Worked example
Two puts secured at a $50 strike tie up 2 × 100 × $50 = $10,000. Collecting $3 per share of total premium over a 120-day cycle earns 2 × 100 × $3 = $600, a 6% cycle return that annualizes to 6% × 365 ÷ 120 ≈ 18.3%.
Frequently asked questions
Does this include gains or losses on the stock?
No — it measures only the premium income relative to secured capital. If you are assigned and the stock keeps falling, unrealized losses on the shares can wipe out the premium, so treat the annualized figure as a best-case income yield.
Why annualize the return?
A single cycle only lasts a few weeks or months, so its raw return is not comparable across strategies. Annualizing scales it to a yearly basis, assuming you could repeat similar cycles — useful for comparison, not a guarantee.
What capital does the wheel require?
Selling a cash-secured put requires enough cash to buy the shares at the strike (strike × 100 per contract). That cash is set aside for the whole put phase, which is the capital the return is measured against.
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Educational estimate, not investment advice. Options and margin involve substantial risk.