The Put-Call-Put (PCP) or Wheel Strategy: A Real-Life Example from Alan’s Portfolio

The Put-Call-Put (PCP) or Wheel Strategy is a multi-tiered option-selling strategy that incorporates both selling cash-secured puts and covered call writing. In this article, a real-life example, taken from one of my option portfolios, will be analyzed to show the advantages of mastering both strategies.

Graphic representation of the PCP (Wheel) strategy

• #1: Start by selling an OTM cash-secured put
• #2: If and when exercised, the stock or ETF is purchased at a discounted price
• #3: Covered calls are written against the recently purchased shares
• #4: If and when exercised, shares are sold generating the cash to then secure another put trade (back to #1)

 

Real-life example with Nextracker Inc. (Nasdaq: NXT)

• 11/10/2025: STO 4 x 11/21/2025 $90.00 puts at $0.77 (NXT trading at $106.50)- Put leg
• 11/24/2025: Buy 400 x NXT at $90.00 (“allow” put exercise on 11/21/2025 as NXT below $90.00)
• 11/24/2025: STO 4 x 12/19/2025 $95.00 calls at $3.12 (covered calls)- Call leg 1
• 12/19/2025: NXT closes at $88.34; $95.00 calls expire worthless
• 12/22/2025: STO 4 x 1/16/2026 $95.00 covered calls at $3.51- Call leg 2

 

Expiration of the 1/16/2026 Call Contracts: 2nd call leg

• NXT closes at $96.36
• Decided to allow assignment and sell 400 shares at $95.00 due to its upcoming earnings report on 1/27/2026

 

68-day final PCP calculations spreadsheet

Discussion

• Significant returns can be generated with 68-day defensive Put-Call-Put (PCP) or Wheel trades
• Option trades can be crafted to align with all market environments and personal risk tolerance
• In the case of NXT, a significant 68-day return was initially captured and realized (73.95% annualized)
• These are low-risk, not no-risk trades

 

 

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Expected Price Movement Calculator

The Expected Price Movement Calculator is designed to generate an approximate projected trading range for the underlying security, specific for selected contract expiration date. The at-the-money implied volatility (IV) of the stock or ETF (exchange-traded fund) is used to achieve this valuable information.

Inherent in the spreadsheet is a conversion formula that recalibrates the annualized IV stat into one specifically for the contract being traded. Easily accessed option-chain data is entered into the white cells at the top of the spreadsheet and calculations will appear in the yellow cells below.

Click here for a video & more.

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Free training resources

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Your generous testimonials

Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to publish several of these testimonials in our blog articles. We will never use a last name unless given permission:

1. MoneyShow Masters Symposium Las Vegas

Tuesday July 21, 2026

Caesars Palace Hotel, Las Vegas

Title: The Put-Call-Put (PCP) or Wheel Strategy

Subtitle: Generating cash flow & buying shares at a discount using covered call writing and cash-secured puts 

Description:

Selling stock options is a proven way to lower our cost-basis and beat the market on a consistent basis. Two such low-risk strategies are covered call writing and selling cash-secured puts. This presentation will detail how to incorporate both strategies into one multi-tiered option-selling strategy where we either generate cash-flow or buy stock at a discount. I refer to this as the Put-Call-Put (PCP) Strategy, also referred to as the wheel strategy.

The basics and pros and cons are discussed as well as a real-life example and introduction into the BCI Trade Management Calculator (TMC). This seminar is appropriate for those who look to generate modest, but repeatable, returns which will enable us to beat the market on a consistent basis while focusing on capital preservation.

 

2. Mad Hedge Investor Summit

Tuesday September 15, 2026

12 PM ET – 1 PM ET

Topic, description & registration link to follow.

3. Toronto Money Show

September 24 – 25, 2026

MaRS Center, Toronto Canada

4. Orlando Money Show

October 5 – 7, 2026

Hilton Orlando Lake Buena Vista

Details to follow.

5. American Association of Individual Investors: NYC Chapter

Date and time to be confirmed.

6. Triple Edge Investing Summit: Technical Analysis • Options Strategies • ETF Mastery

Saturday January 23, 2027

Zoom presentation

All-day paid event

All-day event hosted by 3 experts:

• Dr. Alan Ellman (options)
• Dr. Eric Wish (technical analysis)
• Les Masonson (ETFs)

Hosted by TraderLion University

Details to follow.