I have about $10k in my brokerage account I can allocate towards options. If running the wheel on 30DTE CSP strikes, it looks like I can collect about $100 in premium each month. Selling CCs on assigned shares seem to produce around the same. So 1% per month.
Help me justify why this is favorable over just holding an ETF pair like VTI/VXUS and getting an average yearly return around 8-10%.
Sure The Wheel can get you a couple percentage points higher annually, but I don’t see how this is worth the extra risk you’re taking on by using individual stocks as collateral and potentially being assigned, regardless of how strong the stock is.
Yes I’m a rookie so this is probably a terrible question, but I’d like some perspective on this.