Wheel Glossary
Covered call in Wheel Trading
Covered call means a short call backed by shares you already own. It matters because it is the income phase after assignment in a standard wheel cycle.
Definition
A short call backed by shares you already own.
- 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 is the income phase after assignment in a standard wheel cycle.
- 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
Selling calls on shares you are not actually willing to let go.
- 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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