January was an exceptional month. The wheel strategy delivered strong results, with premium income well above my monthly target. Here's how it all broke down.
The Numbers
What Happened
January saw elevated volatility early in the month, which meant fatter premiums on both covered calls and cash-secured puts. When the market gets nervous, options sellers get paid. I stuck to my usual approach: SCHD and VTI only, 30-45 DTE, strikes 1-2 points out of the money.
The $31,930 in options income was well above my $7,500/month baseline target. But I've been doing this long enough to know that some months are feast and some are famine. I don't adjust my lifestyle based on a single good month — that's how you get into trouble with variable income.
Positions
| ETF | Strategy | Notes |
|---|---|---|
| SCHD | Covered Calls | Multiple cycles, strong premium |
| VTI | Cash-Secured Puts | Collected premium, not assigned |
Lessons & Reflections
The temptation when premiums are rich is to sell closer strikes for even more income. But that increases your chance of assignment at the wrong time. I kept my strikes conservative and let the elevated IV do the work.
Looking Ahead
February will likely be quieter. Volatility has settled down, which means thinner premiums. But that's fine — the wheel doesn't require fireworks every month. Consistency beats intensity.
Net savings for January: $27,550. The squirrel's pile of nuts keeps growing.
— Russell