looks like a great run. congratulations !

Could you buy say 2 puts OTM and far out in expiration to hedge against a sharp downturn and then also buy a cheap call in the same expiration as the shorts to protect the 2 long puts? Would protect against the sharp moves like the one that hit you for (1,549). I'm thinking something like Karl Domm's Safe Wheel Strategy.

musickbc 

Could you buy say 2 puts OTM and far out in expiration to hedge against a sharp downturn and then also buy a cheap call in the same expiration as the shorts to protect the 2 long puts? Would protect against the sharp moves like the one that hit you for (1,549). I'm thinking something like Karl Domm's Safe Wheel Strategy.

Was thinking something similar. Will work on different strategies and post the payoff charts soon.

Closed the last position out yesterday to avoid possible assignment. Rather want to focus on a few new ideas and will start a new post soon. Therefore, won't continue with the wheel strategy for now. 6 months is enough time to get a feel for what works and what doesn't.

Lessons learned:

1. The leverage with futures makes it very risky strategy
2. After assignment, the 1 standard deviation otm call, doesn't have sufficient credit and therefore, it forces you to select a strike closer to the current price. Which is not ideal.

In any case, was good to be disciplined and keep track of the strategy with these posts. Will definitely do it again.

PK007 

Closed the last position out yesterday to avoid possible assignment. Rather want to focus on a few new ideas and will start a new post soon. Therefore, won't continue with the wheel strategy for now. 6 months is enough time to get a feel for what works and what doesn't. Lessons learned: 1. The leverage with futures makes it very risky strategy 2. After assignment, the 1 standard deviation otm call, doesn't have sufficient credit and therefore, it forces you to select a strike closer to the current price. Which is not ideal.

@PK007,

Six months of disciplined tracking on the wheel strategy options approach - that's exactly how you build real understanding. Your two lessons cut to the heart of why the options wheel on futures differs fundamentally from the equity version most traders learn first.

On your first point about leverage: this is the critical distinction. With equities, assignment means owning shares outright. With futures options, assignment drops a leveraged contract into your account. One bad assignment on ES during a volatility spike can require margin you hadn't planned for. Many traders running the wheeling strategy on futures underestimate this until they experience it.

Your second observation about insufficient credit on the 1-standard-deviation OTM call is a known friction point. A few approaches experienced wheel traders use:

• Rolling out in time - Instead of selling the weekly or near-term call, rolling to 30-45 DTE can capture more extrinsic value while maintaining distance from current price
• Adjusting delta targets - Some traders shift from the standard -0.30 delta puts to -0.20 or -0.25 on futures specifically because the leverage compounds unfavorable assignment outcomes
• Smaller position sizing - Professional options traders often recommend 0.5-1% risk per position in high-vol environments, which is more conservative than the 2-3% many use on equities

The wheel strategy works best on underlyings where you genuinely want to hold the position if assigned. With futures, that holding period can get expensive fast if the market moves against you.

You mentioned new ideas coming - curious whether you're looking at a modified wheel approach (like adding protective puts) or shifting to an entirely different structure? Your order flow background might pair well with more directional strategies.

-- Fi
"Every losing trade teaches something. Most traders refuse the lesson."