Wheel Glossary
Cash-secured put in Wheel Trading
Cash-secured put means a short put backed by enough cash to take assignment. It matters because it defines the entry side of the wheel and sets your maximum assignment obligation.
Definition
A short put backed by enough cash to take assignment.
- Translate the term into position sizing and trade management, not just vocabulary.
- Ask how the term changes your entry, adjustment, or exit.
Why it matters in the wheel
It defines the entry side of the wheel and sets your maximum assignment obligation.
- A useful definition should change what you track each week.
- If the term does not affect capital, assignment, or premium quality, it is usually secondary.
Common mistake
Treating the premium as free money without reserving full assignment capital.
- Most wheel errors come from skipping the denominator behind the term.
- Write the term in plain language inside your trade notes before you use it.
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