Finding quality trade ideas for the Wheel Strategy is essential—but where do you actually get them? In this episode, Dan Passarelli breaks down the best (and worst) sources for finding wheel trade candidates. From trade idea services and investment clubs to news media and DIY analysis, Dan explores the pros and cons of each approach and shares what really works for covered calls and cash-secured puts.

Dan also discusses why boring, sideways stocks make the best wheel candidates, why the pundits' favorite stocks are often the trickiest to trade, and teases an upcoming series on fundamental, technical, and volatility analysis for building your own watchlist.

What You'll Discover in This Episode:

Resources & Links:

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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In this episode of Wealth Building with Options, Dan sits down with James Kostulias, Head of Trading Services at Schwab—where he oversees the end-to-end trading experience for clients at a firm averaging over 7 million trades per day for three consecutive quarters.

From Schwab’s latest Q4 Trader Sentiment Survey to the dramatic evolution from “options are too risky” to “options as risk management tools,” James shares an insider’s view of how retail trading has fundamentally transformed.

If you've ever wondered how serious traders think about hedging, income generation, and adapting to different market regimes, this conversation is packed with insights you can put to work in your own trading.

Guest Bio – James Kostulias

James Kostulias is Head of Trading Services at Schwab, where he oversees the end-to-end trading experience for clients, including the award-winning thinkorswim suite of platforms. With more than 25 years in financial services—much of it with TD Ameritrade in retail, technology, and active trader leadership roles—James has been at the forefront of the industry’s evolution from “options are too risky” to “options as risk management.”

He has served as a board member and former president of the Wall Street Technology Association, previously sat on FINRA’s Technology Advisory Committee, and is a graduate of the SIFMA Securities Institute program at Wharton. He holds a B.A. in Business Administration from Rutgers University along with Series 47, 24, and 63 licenses.

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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Why Traders Lie to Themselves — and How to Stop

When it comes to covered calls and cash-secured puts, most traders tell themselves comforting half-truths:

In this episode, Dan Passarelli unpacks the psychology behind these lies and how to replace emotional trading with data-driven discipline. Through relatable stories (including a red-light ticket and an ancient Roman twist), Dan shows why even the smartest investors fall into the trap of self-deception—and how to break free from it.

You can’t control the market—but you can control how you react.

Subscribe & Support: WealthBuildingPodcast.com — Get access to video extras, subscriber-only trade ideas, Dan’s real covered call and cash-secured put trades, monthly AMAs, and unusual options activity alerts.

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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Episode 38: The Objective of My Affliction

95% of traders lose money. Not because they're not smart—but because they're missing something fundamental.

In this episode:

This episode is short but mighty. Discover what separates the winning 5% from everyone else.

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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Summary:

Key Takeaways

Practical Tools Mentioned

Links & Resources

About the Guest

John Kmiecik is a senior coach at Market Taker Mentoring. He works 1-on-1 with traders on strategy selection, risk management, and the psychology required to execute consistently.

Support the Show

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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In this episode, Dan Passarelli explores how biology and psychology quietly influence every trading decision—often more than logic or data. Through a story that begins in the Chicago trading pits and leads all the way to a conference in Hong Kong, Dan recounts his unexpected encounter with John Coates, a former Goldman Sachs trader turned neuroscientist and author of The Hour Between Dog and Wolf.

That meeting opened Dan’s eyes to how our hormones, brain structure, and subconscious impulses affect trading outcomes—especially in long-term strategies like the Cycle Recycle Trade, where patience and discipline are tested by human nature itself.

The title, “Crossing the Red Dragon,” refers both to Dan’s physical journey across China and the metaphorical journey traders face when crossing from logic to emotion—from the rational prefrontal cortex to the ancient instincts that drive risk-taking.

Inside the Episode

Why trading decisions are influenced as much by biology as by strategy

How hidden biases—like availability and recency—cause traders to misread success or failure

Why statistically sound systems still “feel wrong” when results come unevenly

The psychological tug-of-war between small, immediate rewards and larger, delayed ones

How understanding the science of compounding helps traders stay disciplined through losing streaks

Key Insight

“Trading isn’t just logical—it’s biological.

Recommended Reading

Book: The Hour Between Dog and Wolf by John Coates — a fascinating look at how the body’s chemistry and brain structure affect financial decision-making. Available on Amazon. John Coates is a former Goldman Sachs and Deutsche Bank trader who earned his PhD at Cambridge and became a neuroscientist studying the biology of financial risk taking. 

Subscribe to Wealth Building with Options on Spotify, Apple Podcasts, or YouTube.

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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Have you ever "felt" something was off in the market—before you could explain why? In early 2021, Dan noticed unusual behavior across several stocks; days later, the Archegos Capital blow-up surfaced. It wasn't clairvoyance—it was his subconscious processing patterns his conscious mind hadn't connected yet. In this episode, Dan explores how biology and psychology shape trading decisions: why fear and overconfidence sneak in even when you know the math, and how to align instinct with process so you can trade with discipline even when emotions run hot.

Key Takeaways

Memorable Quotes

How to Apply This Tomorrow

Subscribe & Support

Join the Wealth Building with Options community for more: video extras, real trades from Dan's account, monthly AMAs, and unusual options activity alerts. Subscribe at WealthBuildingPodcast.com.

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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What If You Could Turn a Losing Trade Into a Winner—Without Taking the Loss?

Most covered call and cash-secured put traders hit a wall when their trades go against them. The stock blows through their strike price, they're staring at a loss, and panic sets in. But what if there was a way to defer that loss, improve your odds, and keep your original credit intact?

Enter the net-zero roll—the technique that separates winning traders from frustrated ones.

In this episode, Dan reveals how this powerful management strategy lets you "kick the can down the road" by rolling out in time and up or down in strikes for roughly the same premium you paid to close. The result? You preserve your credit, dramatically improve your probability of success, and—most importantly—keep your psychology steady so you're not losing sleep over one bad "wheel cog."

But here's the catch: your annualized return takes a hit. And that's where Dan's One-Third Rule comes in—a reality check that'll save you from disappointment and help you set realistic expectations for what wheel trading actually delivers.

Coach John Kmiecik joins the conversation to share his insights on screening, technical analysis, and the mindset shifts that separate struggling traders from those who trade with confidence and ease.

Why This Episode Will Change How You Think About Covered Calls and Cash-Secured Puts

The truth about annualized returns: They're marketing, not reality. Discover why your actual returns will likely be about one-third of your initial calculations—and why that's still excellent.

The net-zero roll explained: Learn the exact mechanics of buying back your short option and selling a later-dated, farther OTM option for approximately zero cost. It sounds like magic, but it's pure technique.

Psychology meets technique: Why does this strategy work so well? Because it removes the emotional weight of "losing" on individual trades and helps you see the bigger picture of the full cycle.

The One-Third Rule: Dan's back-of-the-napkin formula for setting realistic expectations. If you calculate 12% annualized, expect closer to 4%. Why? Rolls, adjustments, early exits, and the messy reality of trading.

When "perfect" isn't the goal: Stop obsessing over every strike price and learn to manage early and often. Small, proactive adjustments beat expensive, late-stage scrambles every time.

Your Practical Playbook

When to roll: As soon as price moves through your strike. Don't hope it comes back—act immediately.

How to structure the roll: Aim for net-zero or close to it. Small debits or credits across multiple "cogs" balance out over the cycle.

Screening and strike selection: Use technicals to guide you, but don't overthink it. The real edge is having a management plan, not picking the perfect strike.

Tracking your cycles: Log each trade within the cycle—credits, debits, days added, and new strikes—so you can see your true cycle P&L and learn from every wheel turn.

What You'll Walk Away With

By the end of this episode, you'll understand why experienced wheel traders don't sweat individual losses—they manage them. You'll see how the net-zero roll transforms a potential disaster into a highly probable win, and you'll learn to think in terms of complete cycles rather than isolated trades.

This is the mindset shift that took Dan decades to figure out. Now you can have it in under 40 minutes.

Resources Mentioned

Get More From This Community

Don't miss a single episode—subscribe on Spotify, Apple Podcasts, or your favorite podcast app.

Want to level up your wheel trading? Consider a paid subscription for hands-on video training, real trade examples from Dan's brokerage account, monthly Q&A sessions, and actionable trade alerts.

Got questions? Send them in after you subscribe, and they might be featured in the next AMA!

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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In this episode of Wealth Building with Options, Dan Passarelli dives deep into the motivations behind trading the wheel strategy—and why understanding them can make or break your results.

Dan begins with a mistake he sees all too often: traders push strikes too far away from the stock price, "running and hiding" instead of sticking to their true objective—getting assigned—which undermines their entire strategy. From there, he lays out the framework of the who, what, and why of the wheel strategy:

Who trades the wheel?

What is cycling into wheel trades?

Why trade the wheel? Dan highlights both trade objectives (intentionally getting assigned into or out of stock) and skate objectives (capturing premium without assignment). For cash-secured puts with trade objectives, he identifies three main sub-motivations:

The Cycle Mindset Revolution

A key takeaway: successful wheel trading isn't about the profitability of individual trades, but about completing profitable cycles. Dan explains how traders can recover from losses by continuing the sequence until the overall cycle closes in profit: "I sold this put at $1 and now I have to buy it back at $2.50. I'm down $1.50 but I sell another put at $1.25... It took me 3 trades to lock in 50 cents. That is a completed cycle." This mindset shift—focusing on cycles rather than one-off wins—separates successful wheel traders from those who give up too early.

Professional Insights

Dan also reveals how professional traders approach the wheel differently. Instead of hiding far out-of-the-money, institutional traders often sell "500, 1000, 2000 puts right at the money," showing why proper strike selection is critical when the goal is assignment.

Whether you're new to the wheel or already using it, this episode will fundamentally change how you think about each trade within the larger cycle—and why patience with the process, not individual results, drives long-term profitability. By the end, you'll understand why focusing on cycles, not individual trades, is the key to wheel success.

Resources & Links:

Disclosure:

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don’t trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners’ specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.  

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Most wheel traders obsess over single trades and miss the bigger picture. In this episode, Dan Passarelli shares the mindset shift that changed his covered call and cash-secured put trading: manage in cycles, not one-offs.

Using a powerful casino/blackjack analogy, Dan reveals why even professional card counters can lose money for six months straight despite having an edge—and how "how you play" determines your actual results, not just the statistical probabilities. He then introduces the Net Zero Roll, a practical technique to transfer short-term options losses from money to time by rolling up and out, keeping the wheel moving toward profit.

Through a detailed walkthrough of a real trading scenario (a May 15th, 170 call that goes against you), you'll discover how three separate trades in one cycle can deliver the same 85-cent profit you wanted from one trade—it just takes a bit longer. Dan emphasizes this was his personal epiphany that transformed his trading and inspired his upcoming book.

Key Takeaways

What You'll Discover

Action Steps

Coming Up

Dan mentions the second key area for wheel success—rewiring your brain—will be covered in upcoming episodes. This psychological framework will span several shows as it's central to his new book.

Resources

Disclosure: Options involve risk and are not suitable for all investors. Prior to buying or selling an option, investors must read Characteristics and Risks of Standardized Options (ODD) which can be found at https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Don't trade with money you are not prepared to lose. Anything discussed on this show is intended to be generalized information and not intended to be a recommendation to buy or sell any security. The host and guests are not familiar with listeners' specific situations. For trading information relevant to your specific needs, speak with a licensed broker or advisor.

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