The Wheel Strategy on tastytrade, Automated End to End

Huzefa Kudrati Oct 24, 2026 7 min read

The wheel is the most patient options strategy there is: sell a cash-secured put, get assigned the shares if the price falls, sell covered calls against the shares until they are called away, repeat. Nothing about it is hard. What wears people down is the calendar: a decision every week or month, for years, at the same time of day, with the same discipline.

This guide shows how to run the wheel on an ETF through tastytrade with Tradetron doing the repeating. It uses SPY as the example because ETF options are supported and liquid; check the supported-instrument list before trying it on a single stock.

The wheel as two rule sets

Written out, the wheel is this:

Stage A, puts. Every Monday at 10:30 am ET, if I hold no shares, sell one SPY put expiring at the end of next week, strike about 3% below the price. Buy it back at 50% of the credit. If it is still open at expiry and finishes in the money, I get 100 shares; move to Stage B. If it expires worthless, repeat Stage A next Monday.

Stage B, calls. Every Monday at 10:30 am ET, while I hold 100 shares, sell one SPY call expiring at the end of next week, strike at or above my assigned price. Buy it back at 50% of the credit. If it finishes in the money, the shares are called away; go back to Stage A.

The numbers (3%, 50%, Monday, next week) are the example's. Yours come from your own testing and your own view on SPY.

Stage A in Tradetron

In the Strategy Builder, set the underlying to SPY and the expiry to the weekly contract after the current one. Then:

Entry condition: day is Monday, time is between 10:30 and 10:35 am ET, and the strategy's holding_shares state is false.
Position: sell one SPY put, strike about 3% below the current price (choose the strike as a distance from the price so it moves with the market).
Early close: buy the put back when its price has fallen to half of what you sold it for. Set this as the leg's target.
No stop. The wheel accepts assignment; a stop on the put defeats the point. If you want a disaster exit, make it a hard one (for example, SPY down 10% from your entry) and know that it changes the strategy.

At expiry, the strategy checks the close against the strike. If the put finished in the money, it sets holding_shares to true. That is the whole hand-off.

The assignment happens at tastytrade

Tradetron places and manages options orders in your account. It does not hold shares and it does not run the exercise process. tastytrade does: an in-the-money short put at expiry becomes 100 long shares of SPY in your account the next morning, and your buying power reflects that.

Two things to know:

Tradetron does not read your share balance. The strategy knows it was assigned because it saw the put expire in the money, not because it looked at your positions. If something else happens in the account, the strategy's state and the account can disagree. Check the account the morning after any expiry that was close to the strike.
Early assignment is possible. SPY options are American-style. A short put deep in the money, or a short call before an ex-dividend date, can be assigned early. Tradetron would still see an open option. Treat the week of SPY's quarterly dividend (March, June, September, December) as a hand-check week.

Stage B in Tradetron

Entry condition: Monday, 10:30 to 10:35 am ET, holding_shares is true.
Position: sell one SPY call expiring at the end of next week, strike at or above the strike of the put that was assigned (store that strike when Stage A ends, and reuse it).
Early close: buy the call back at 50% of the credit.
At expiry: if the call finished in the money, the shares are called away at tastytrade; set holding_shares back to false. Stage A resumes next Monday.

Some wheel traders roll the call up and out instead of letting shares go. That is a third rule set, and it is worth adding only after the two-stage version has run cleanly for a while.

Position size and cash

A cash-secured put on SPY needs enough buying power to take 100 shares at the strike. At current prices that is a five-figure sum per contract, which is why many traders run the wheel on QQQ or a lower-priced ETF, or use XSP-sized products where no shares change hands and the wheel becomes a plain premium-selling program instead. Tradetron does not check your cash for you; set the quantity to one contract and keep the cash in the account.

Testing the whole cycle

Backtest each stage on SPY weekly options to see how often the put is assigned and how long shares are typically held. The backtest tells you about your rules; it says nothing about next quarter.

Then run the full strategy Live Offline for at least one assignment cycle, which may take a month or more. Live Offline runs the rules on live prices during real sessions, shows every trade it would have placed, and sends no order. You are checking three things: that Stage A fires on Mondays and not on holidays, that the state flips when a put finishes in the money, and that Stage B picks the strike you meant. How to read a Live Offline run.

When it behaves, connect tastytrade. The connection opens on a hosted sign-in page, so your tastytrade password never goes into Tradetron, and your account needs the options approval level that allows cash-secured puts and covered calls. What happens to your orders once a broker is connected.

Frequently asked questions

Does Tradetron sell the covered call automatically after assignment?

Yes, if the strategy is built as two stages with a state that flips at an in-the-money expiry. The assignment itself is done by tastytrade; Tradetron reacts to the expiry it observed. Confirm the shares are in the account the next morning.

Can I run the wheel on an individual stock?

Check Tradetron's supported-instrument list for US stock options first. This guide uses SPY because ETF options are supported and liquid. The two-stage logic is the same for any underlying that is.

What does it cost to run?

Building, backtesting and one Live Offline deployment are on the free plan. Running the wheel live in your tastytrade account starts with the Starter plan at $15 a month; see the pricing page. tastytrade's own commissions and fees apply to every order.