Frequently asked questions

Wheel trading is an options-income approach that commonly begins by selling a cash-secured put. If the put expires, you may sell another put. If you are assigned shares, you can hold them, sell them, or sell covered calls against them. If the shares are later called away, the cycle can begin again.

It is a put option sold while keeping enough cash available to buy the shares if assignment occurs. You receive a premium for taking on the obligation to buy at the agreed strike price. The cash is not free capital while that obligation is open.

A covered call is a call option sold against shares you already own. You receive a premium in exchange for agreeing to sell those shares at the strike price if the option is exercised. It can create income, but it also limits upside above the strike price.

A premium dollar amount alone does not say how much capital is tied up or for how long. A yield view can make contracts with different strikes and expirations easier to compare. It is one input, not a promise of a result: the underlying stock and the risks of the promise still matter.

A put spread combines a sold put with a lower-strike put purchased for protection. The protection costs some premium, but it places a defined lower boundary on the loss from a severe decline. YieldGen treats the two legs as one logical position when presenting the risk and return picture.

YieldGen is portfolio software for people using options-income strategies. It organizes a repeated workflow: see available cash, evaluate option opportunities, size and execute a trade through your brokerage connection, then follow the positions and their exposures across the portfolio.

On Configure Broker Links, the Full History column shows Limited when the connection does not supply enough transaction detail for YieldGen to calculate every metric. Positions and live prices are unaffected; the limit applies to the activity feed used for yields, recovery, and related history.

What is missing. The gap depends on the broker and link type. It may include:

• Lookback — activity may stop after about two years even when older history exists at the broker.
• Activity types — some feeds omit categories YieldGen needs, such as option expiration, assignment, exercise, dividends, fees, or cash movements.
• Both — a link can cap lookback and omit categories.

Examples include Schwab and Webull (often about two years and incomplete categories) and Moomoo (buy/sell activity without published option events). Tastytrade typically supplies full history on this path.

How it appears in the app. Metrics that need the missing detail show — instead of a number. Help text states that the broker link does not provide full transaction detail required to calculate the value. The same wording is used wherever that metric depends on history (Detail past yields, Performance, recovery views, and similar screens).

Ask your broker for options approval that includes cash-secured puts and covered calls. That is enough for almost everything in YieldGen. Spreads need the next spread-capable level (at Schwab, Level 2). Naked / uncovered writes need a still-higher approval and are not available in IRAs. The app repeats these steps on Connect your brokerage.

YieldGen helps organize information and workflows. It is not a source of investment, legal, or tax advice, and it does not make a trade suitable merely because the numbers look attractive. You make your own decisions and execute trades through your regular brokerage platform.

One small option premium can seem insignificant. The strategy becomes operationally demanding when there are many positions, expirations, and decisions to manage. YieldGen is designed to make that repeated work more visible and more manageable without losing sight of the whole portfolio.

It puts annualized yield and dollar premium together for each available strike and expiration, so you can scan opportunities in a consistent view. The contract detail then lets you go deeper before choosing whether to act.

It is the usual cash-secured yield (including interest on pledged cash), built from the time-value part of the premium only, then divided by the option’s implied volatility. Ordinary yield uses the full premium; vol-adjusted yield strips out intrinsic so deep in-the-money puts are not favored just because most of the premium is already “in the money.”

Use it after you have narrowed candidates on other grounds (stock, strike distance, liquidity, portfolio fit). Treat about 1.0 as a soft floor (yield roughly in line with IV), and among an otherwise similar short list prefer the higher figure. It is a final check or tiebreaker, not the first filter of the whole grid.

It is a collateral-and-days weighted average of each open short put’s yield if held (see the next question). That headline summarizes remaining commitments through each put’s expiration, not a simple average of what the currently pledged book would earn if every put had the same time left.

Example: two sold puts, each tying up $10,000. One has 10 days left at 20% yield if held; the other has 40 days at 10%. A straight collateral-weighted average of the two rates is 15% — what the pledged book “looks like” today. The Summary box uses cash × days weighting and shows 12%: 20% × $10,000 × 10 days plus 10% × $10,000 × 40 days, divided by $10,000 × 10 plus $10,000 × 40.

If any included put lacks a valid option quote, live stock price, or calendar days to expiration, the headline is withheld rather than shown partial. When a put expires, its pledged cash drops out of the average. Freed cash is not assumed to sit idle or roll into a new put. Assignment cost is not subtracted; Risk of Assign states the dollar cost to buy puts back.

Yield if held is the annualized remaining time-value carry on pledged cash from today through expiration. It excludes gains or losses from changes in intrinsic value if the stock moves. It is not a forecast of total forward P&L on the option, and it does not assume the put expires worthless.

How it is calculated. YieldGen requires a live stock price and a valid option quote. Remaining time value (quote minus intrinsic at spot) is annualized on the short strike as pledged cash per share by treating it as constant daily carry over the calendar days left (divide by days, multiply by 365). That even spread is how the rate is defined; it is not a forecast that theta will run evenly day by day. With few calendar days left, the annualization step can make the percentage look large even when little dollar time value remains; decay is often faster near expiration, and assignment and stock risk stay in the position. When your account, broker, and trade structure support it, YieldGen adds the published yield on the designated cash equivalent (for example a broker money-market fund or an ETF such as SGOV) on the pledge slice that may earn it. Put spreads with the same expiration use signed net time value (short minus long); a negative net shows as negative carry. Diagonal spreads omit this metric. If spot is missing or the quote is materially below intrinsic, the value is withheld.

Deep in-the-money puts. Most of the quote is intrinsic. Yield if held uses time value only. If only a few cents of extrinsic remain, the rate is small; it is not a verdict that the trade is healthy.

Where you see it.

• Summary — Pledged Cash yield — a cash-and-days weighted average of each open short put’s yield if held.
• Option detail — Yield if held (close-existing card) — that rate for the one contract on screen, with days left shown beside the percentage.
• Exposures — Yield if Held % — colors each tile by the same rate (works without full transaction history).

Exposures are the ways open positions can affect the portfolio: capital committed, dates when obligations may come due, positions that may move together, and concentrations that are harder to see one trade at a time. Seeing them together can help you avoid mistaking a collection of individual trades for diversification.

It answers the question every open position eventually raises: would the cash tied up here do better somewhere else? Selling a put pledges collateral, and that collateral is either still earning its keep or it is sitting out the rest of the term waiting for a payoff that has already mostly happened.

Leaving a position alone is not free money and it is not nothing: you still collect the time value that has yet to decay, plus interest on the pledged cash — the same forward carry as Yield if held. Closing frees that same cash to back a fresh contract instead. Recycle advantage compares those two futures, subtracts what the round trip costs to trade, and paints the answer on the position.

• Green — the days left pay little more than cash, so the collateral looks better redeployed.
• White — break-even. Closing and holding are worth about the same.
• Red — the remaining days are still out-earning a fresh trade, so the position is worth keeping.

Because white sits exactly on the break-even line, there is no threshold to memorize: green means recycle, red means leave it alone, and the further from white, the clearer the case. And since the tiles are already sized by the dollars at stake, the largest green tile is your largest opportunity rather than merely your best rate.

Why it will not chase a nearly worthless contract. Trading costs are spread across the days remaining, which matters more than it sounds. A contract quoted at a few cents with three days to run looks almost free to buy back, but there is barely any yield left to rescue and you would still pay a full round trip to go and get it. That position reads red, not green.

The rate it compares against. The comparison has to assume something about what a fresh trade would earn you, so it uses the redeployment rate in Settings — the same opportunity-cost rate the recovery ledger uses, 10% a year unless you change it. Raise it if you reliably find better trades, and more positions will start to look worth recycling.

Why one number instead of several. Earlier versions of YieldGen showed the exit decision as three separate bars. Working through the arithmetic showed they were not independent readings of the position: “capital freed per dollar of closeout” turns out to be the remaining yield restated without adjusting for how many days are left, and “yield improvement on close” is mathematically bound to that same quantity, so it can tell you a trade is running ahead of plan but never whether what remains is worth keeping. One properly framed number does the work of all three, and spares you reading them against each other.

As with every figure in YieldGen, it is one input rather than a recommendation. It does not know your tax position, your view on the underlying stock, or whether you actually have a better trade waiting for the cash.

Clusters show mega-sector concentration: tickers that look different in a list but often move together. Holding five names that all live in the same cluster is closer to one big bet than five independent ones.

The Calculation YieldGen calculates the correlation between all pairs of stocks. Correlation is always between −1 and +1:

• +1 — the two stocks’ daily percent changes move in lockstep (same direction, proportional sizes).
• 0 — knowing one stock’s daily move tells you nothing useful about the other’s.
• −1 — the two stocks’ daily percent changes move in opposite directions.

How the six clusters are built. Once a day, YieldGen starts from the eleven major U.S. sector funds (the familiar SPDR sector ETFs). Highly correlated sector funds may be combined into mega-sectors, and only as pairs:

1. Combine the two remaining sector funds with the highest correlation into one mega-sector, keeping both names — for example Tech & Comms.
2. Repeat until six mega-sectors remain. A pair does not absorb a third fund; a third sector stays separate if it was not as close as the pair that already merged.

Every other stock is then assigned to exactly one of those six mega-sectors: the one it most resembles. For a combined pair, that is the stronger match to either leg — so a telecom name can join Tech & Comms via Comms rather than Tech alone. (A brand-new name with too little price history to measure stays on its own until enough data exists.)

How to use clusters.

• On the Watchlist, prefer symbols from clusters that are little- or un-represented in your book—so a new put candidate is less likely to amplify the concentration risks you already carry.
• On Exposures in cluster view, check whether capital and pledge are piled into one or two groups even when the ticker list looks diversified.
• On a stock’s detail page, read the correlation matrix: it shows how that stock tends to move with (or against) each of the six mega-sectors, so you can see which concentrations you would add to—and which you would not—before you sell options against it.

When a sold put is assigned and shares are purchased, the position can continue through stock ownership, dividends, covered calls, and a later sale. YieldGen follows those related events together so the investor can see the full recovery picture rather than only one isolated trade.

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No. Premium is received when an option is sold, but the overall position can lose money if the underlying stock moves adversely. A high quoted yield can be the market's compensation for taking on substantial risk.

Yes. If the stock falls below the strike price, you may be assigned shares at a price higher than their current market value. The premium received reduces the effective purchase cost, but it does not eliminate the loss from a large decline.

Events such as earnings, legal decisions, product announcements, and other uncertainty can change option prices. Higher premium around an event may reflect a greater possibility of a large stock move. YieldGen marks volatility patterns so that timing choice is easier to see, not so that risk disappears.

No. Annualizing a short-term premium can make a number look very large, but the figure does not capture every risk: the chance of assignment, the quality and volatility of the stock, concentration, liquidity, and whether the trade fits the rest of the portfolio. Compare the whole proposition, not one number.

YieldGen is for self-directed investors who understand options or are prepared to learn their risks and mechanics. Options involve risk and are not suitable for every investor. Consider whether a strategy fits your own circumstances and seek professional advice where appropriate.