The Wheel Strategy Trade Plan Template: Written Rules for Every Decision

A written trade plan is the single most powerful tool for consistent wheel execution. It eliminates emotional decisions in the moment. Instead of asking "what should I do with this drawdown?", you consult your plan — which was written when you were calm and thinking clearly. This guide provides the complete template. Copy, customize, save somewhere you'll actually reference it.

1. Why a written trade plan matters

• Removes emotion from decisions — you decided in advance
• Enforces discipline — the plan is the rule
• Enables improvement — you can review what worked/didn't vs plan
• Reduces cognitive load — no re-deciding standard scenarios
• Prevents catastrophic mistakes — big losses come from off-plan trades

2. The complete template — 8 sections

1. Universe — which stocks you'll wheel
2. Sizing — how much per position
3. Entry — delta, DTE, order type rules
4. Exit — profit-taking and expiration handling
5. Roll — when to roll, conditions to meet
6. Assignment — what happens after assignment
7. Risk limits — hard stops on portfolio-level metrics
8. Review cadence — weekly + monthly + quarterly review process

3. Section 1 — Universe (which stocks)

Example template text you'd customize:

UNIVERSE
- Only wheel stocks meeting all 6 criteria (see watchlist post)
- Approved watchlist: [list your 20-30 tickers here]
- Excluded categories: meme stocks, penny stocks, biotech binaries, distressed names
- Never wheel Chinese ADRs, small-caps, or new IPOs
- Review universe quarterly; add/remove based on quality changes

4. Section 2 — Sizing (how much per position)

SIZING
- Max single position: 25% of wheel capital
- Max sector concentration: 30% (measured monthly)
- Total position count target: 5-7 (never more than 10)
- Cash cushion target: 20-30% of wheel capital
- Higher-risk names (BA, BABA, MO): max 10-15% of capital, 0.10-0.15 delta only

5. Section 3 — Entry rules

ENTRY
- Target delta: 0.20-0.25 (0.15-0.20 for higher IV/higher-risk names)
- Target DTE: 30-45 days
- Order type: Limit SELL to open, mid-price, Day duration
- No new positions in 7 days before earnings
- No new positions in 24 hours before FOMC, CPI, PCE, NFP
- Never chase; if limit doesn't fill after 15 min, reprice or cancel
- Journal every entry: date, ticker, strike, DTE, premium, reasoning

6. Section 4 — Exit rules

EXIT
- 50% profit target: set GTC buy-to-close immediately after open fills
- 7 DTE reminder: if still open at 7 DTE, review and decide roll vs let expire
- Let OTM puts expire worthless at expiration
- Never close at a loss on quality names — accept assignment or roll instead
- On losing positions: use roll-or-assign decision tree (see roll rules)

7. Section 5 — Roll rules

ROLL
- Roll only if net credit is available (never for debit)
- Roll to 30-45 DTE (never longer than 60 days)
- Roll conditions: put has been breached AND still want the shares
- Roll direction: out (same strike, later date) or down-and-out (lower strike, later date)
- Skip rolling and accept assignment if: (1) can't achieve net credit, (2) earnings falls in new window, (3) major macro event pending

8. Section 6 — Assignment handling

ASSIGNMENT
- Assignment is EXPECTED, not a failure — 15-25% of puts get assigned
- First CC: sell at strike >= effective cost basis (strike - premium collected)
- CC delta: 0.20-0.25
- CC DTE: 30-45 days
- Take 50% profits on CCs via GTC
- If shares deep underwater (>25%): use rescue cycle playbook (never sell CCs below cost basis)

9. Section 7 — Risk limits (hard stops)

RISK LIMITS (hard stops)
- If any position exceeds 30% of capital: reduce via CC assignment or partial sale
- If any sector exceeds 40% of capital: pause new positions in that sector
- If cash cushion drops below 15%: pause new positions until rebuilt
- If total portfolio drawdown exceeds 25%: reduce all position sizes 30%, wait for stabilization
- If more than 3 consecutive losing cycles on same name: reduce or remove from universe
- These are hard rules, not suggestions

10. Section 8 — Review cadence

REVIEW CADENCE
- Sunday evening (15 min): review positions, upcoming week catalysts, plan Monday trades
- Monday morning (15 min): execute planned trades between 10-11am ET
- Monthly (1st Sunday, 30 min): portfolio review checklist — sizing, concentration, KPIs, process discipline
- Quarterly (Jan/Apr/Jul/Oct): update universe, tax-loss check, plan changes
- Annual: total return calculation, benchmark vs SPY, strategy assessment

11. Next steps

1. Copy this template into a Google Doc or Notion page you'll actually reference
2. Customize each section with your specific numbers/tickers
3. Review before every Monday morning session
4. Update quarterly as your process evolves
5. Reference during any uncertainty — "what does my plan say?"

For real weekly wheel trades I run following a similar plan, the Omega Membership shares the trade plan. Or grab the free Starter Kit.