ETH Options Wheel with Cash-Secured Puts and Covered Calls

Summary

This Binance ETH options Wheel alternates between selling cash-secured out-of-the-money Puts while holding cash and selling covered out-of-the-money Calls while holding ETH. It selects contracts using tenor, Delta, spread, order-book depth, and minimum net-premium filters, and sizes positions from available balances. The strategy uses IOC entries, reconciles fills against actual positions, may roll profitable positions under stated constraints, and checks official settlement records before arranging spot trades to switch between cash and ETH. Transfers between spot and options wallets are manual.

The document describes safeguards and a validation plan, while emphasizing the strategy’s asymmetric risk: Puts can lead to holding ETH through a decline, Calls cap gains above the strike, and the system has no hard stop or hedge. Paper trading simplifies fills and omits maintenance-margin controls, so its results may be optimistic. Offline tests are reported as passed, and a paper Put entry was recorded, but no complete expiry-and-assignment cycle or live end-to-end run had been verified at publication. Historical scenario analysis and a half-year model estimate are described; the latter uses Black-Scholes estimates rather than historical option prices and is not a backtest.

Key ideas

• The Wheel cycles between cash-secured Put selling and covered Call selling on ETH.
• Contract selection uses Delta, expiry, spread, order-book depth, and net-premium criteria.
• Cash-settled expiry requires separate spot trades to acquire or sell ETH when a contract is in the money.
• The strategy can incur large losses from ETH declines and gives up Call upside above the strike; it has no hedge or hard stop.
• Paper fills and model-based estimates have limits, and complete live settlement workflows were not yet verified.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.