[henning]

Buy shares of stocks and use that as collateral to sell covered calls.

[syndicatedjelly]

I tried the wheel strategy once and got burned by contango while holding USO in 2020 :/ It's a great strategy, just be careful what you buy lol

[zoklet-enjoyer]

Yeah I screwed myself over doing that on weed stocks a few years ago.

[maest]

Terrible advice.

[pc86]

It limits your upside but of all the stock-trading advice floating around this isn't very high on the "terrible" list IMO

[maest]

It's terrible in that:

1. it is not positive expectancy (because naive strategies like this never are)

2. it involves trading in less liquid instruments, which means you lose more money to transaction fees

3. you're _selling_ options. Even if these are covered in theory, there's so much scope to screw this up implementation-wise, that it's just not worth it.

I see no redeeming features for this particular "strategy".