Wheel position size calculator

How the numbers work

Selling a cash-secured put means promising to buy 100 shares at the strike, so your broker sets strike × 100 aside until the put ends. A $20 strike ties up $2,000; a $50 strike ties up $5,000.

• Max risk per trade - the most one position can lose (strike × 100 if the stock went to zero). 2% of a $50,000 account is $1,000, so the highest strike for one contract is $10. Keeping each trade small means one bad company cannot do serious damage.
• Max risk per sector - companies in the same sector often fall together. With 2% per trade and 10% per sector, at most five full-size trades share a sector.
• Max risk (portfolio) - leave some cash free for a dip you want to buy or a put you need to roll. 80% in use with 2% per trade is 40 trades at once.

How much to risk per trade

For trading in general, the most you risk on one trade is usually kept to about 1-2% of the account - and as the account grows, ideally down to 0.5-1%. Losing streaks happen to everyone, and the size of each loss decides how deep the hole gets:

For smaller accounts, unfortunately, you generally have to take more risk per trade to make it work: one put on a $20 stock is 2% of a $100,000 account but 20% of a $10,000 one. That is also why most small accounts blow up. If you have to go higher, be extra careful and picky with your stock selection - only companies you would be happy to own, never two big positions in the same sector, and a smaller size when earnings are close.

The account size sets the strikes you can trade. Most good wheel candidates have strikes between $20 and $60, which is why very small accounts struggle: one put on a $40 stock is 80% of a $5,000 account. Margin lowers the cash each put ties up, but not the risk - so this calculator always sizes by the full strike × 100.

A planning tool, not advice. Members can use the same calculator in the Journal (Sizing tab), started from their logged account value and showing what their open positions already use.