Ep85 - Double Dipping When Trading the Options Wheel
Summary
Host Dan Passorelli explores the "double dipping" strategy of selling covered strangles on The Metals Company (TMC) to maximize option premiums. He explains how he sold puts at the $4 strike, accepted assignment on one tranche, and plans to sell calls on the newly acquired shares to generate income from both sides of the trade. The episode also covers the mechanics of payment for order flow and why accepting assignment is often preferable to rolling illiquid options.
Topics discussed
Selling puts on TMC and recent assignments
Episode 85 introduction and subscription reminder
Promotion for the Wealth Builder Trade Room masterclass
Anecdote about Marty Kearny and option pricing quirks
Explanation of Payment for Order Flow (PFOF)
The concept of 'double dipping' in trading
Introduction to covered strangles and the episode topic
Overview of The Metals Company (TMC) wheel trade
TMC price history and rationale for selling puts
Current position status and upcoming Monday plans
Exploring split-time strangles and real-time adjustments
Fundamental and technical analysis for option selection
Position sizing and managing the new share tranche
Why rolling cash-secured puts was not feasible
Liquidity considerations and the 'roach motel' effect
Conclusion and risk disclosure
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