The Layered Wheel — illustrated with real SLV trades
Get paid weekly to wait for the price you wanted anyway.
You don't guess where the stock is going. You pick a few prices you'd be happy to buy at and a few you'd be happy to sell at, then sell short-dated options against those prices week after week. The numbers on this page come from ~12 weeks of actual SLV trades
01
The whole idea, in one breath
Sell calls = get paid for promising to sell a stock at a price you choose.
That's it. The "wheel" is just doing those two things in a loop. The layered part is doing it at several adjacent strike prices at the same time, on short (4–7 day) contracts, so premium income arrives every single week.
02
The 5-step recipe
- 1
Pick a stock you actually want to own
Something boring and reliable. The real example here is SLV — the silver ETF. If a put gets assigned, you end up holding shares, so it should be something you're comfortable owning at the prices you set.
- 2
Define a realistic min and max price
For SLV the working range was $60 to $80. That's where it actually traded over the period — not a wishful range. Be conservative on the low end: that's your worst-case entry.
- 3
Slice the range into rungs $5 apart
Five rungs: $60, $65, $70, $75, $80. Each rung needs cash for 100 shares ($6,000 → $8,000). Total reserved: ~$35,000. Spread across two brokers in the real account so each can run its own slice independently.
- 4
Sell weekly puts on the closest 2–3 rungs
Pick the put strikes nearest to today's SLV price, with 4–7 days to expiration. The real ladder typically has 2–3 puts open at once (e.g., $70 + $75 + $80 puts on the same day). Short DTE = fast time decay = premium collected every week.
- 5
Roll if threatened, accept assignment if you can't
If a put goes in-the-money near expiry, roll it: buy it back, sell a new one further out. The real data shows most puts get rolled, not assigned. When assignment does happen, flip to selling weekly calls one rung above your cost basis until the shares get called away.
03
The real SLV ladder: $60 → $80, $5 apart
Each rung needs enough cash to actually buy 100 shares if the put gets exercised. That's why this is called a cash-secured put — the cash is already set aside. No borrowing, no margin surprises. Splitting rungs across two brokers lets each account work its slice independently.
| Rung | Strike | Account | Cash reserved |
|---|---|---|---|
| Level 1 | $60 | $6,000 | |
| Level 2 | $65 | $6,500 | |
| Level 3 | $70 | $7,000 | |
| Level 4 | $75 | $7,500 | |
| Level 5 | $80 | $8,000 | |
| Total cash needed | $35,000 | ||
$5 spacing fits SLV's volatility — wider gaps for jumpier stocks, narrower for tame ones. The contracts sold each week are typically 4–7 day expirations, not monthly.
04
A real cycle, week by week
These are actual trades from the ladder, on the $65 rung. Walk through what happened from Mar 19 → Apr 15 (about 4 weeks).
Mar 19 (Thu)
SLV near $65 — sell a put close to the money
- →Sold 1 put: $65 strike, expires Mar 20 (1 day out).
- →Premium collected: $373. Cash hits the account immediately.
- →Status at expiry: rolled forward (didn't want assignment yet).
Mar 20 (Fri)
Roll into next week + add a second strike
- →Sold $65 put expiring Mar 25, premium $39.
- →Same day: sold $70 put expiring Mar 27 for $45.
- →Two puts now working at once on adjacent rungs.
Mar 25 (Tue)
$65 put gets assigned — buy 100 shares
- →SLV closed at/below $65. Bought 100 shares at $65 = −$6,500.
- →Cash was already reserved for this exact moment.
- →Effective cost basis: $65 minus $39+$373+other premiums collected at this rung ≈ ~$60/share.
Mar 25 (same day)
Flip the rung — start selling calls
- →Sold $65 covered call expiring Apr 1: premium $256.
- →Now collecting income on shares we own, while waiting for SLV to rise.
Apr 1 → Apr 8
Roll the call forward, twice
- →Apr 1: $65 call expiring Apr 8 sold for $99, then rolled.
- →Apr 8: $65 call expiring Apr 15 sold for $135.
- →Total call premium banked during the hold: $490 ($256 + $99 + $135).
Apr 15 (Tue)
Called away — shares sold at $65
- →SLV finished above $65. Sold 100 shares at $65 = +$6,500.
- →Capital P&L on the shares: $0 (bought $65, sold $65).
- →Real profit = call premiums during the hold: $490 on $6,500 deployed in 21 days = ~7.5%.
- →Cash freed up. Next morning: start selling puts on this rung again.
05
What can actually happen each week?
Every put you sell ends one of four ways. The real data shows most are rolled, not assigned.
The good case
Expires worthless
Stock stays above your strike. You keep 100% of the premium and sell another put next week. In the real data: ~30% of trades.
Most common
Rolled forward
Put goes in-the-money near expiry. Buy it back, sell a new one further out at the same or lower strike. Net: still positive premium, no assignment yet. Real data: ~55% of trades.
Welcome outcome
Assigned
You buy 100 shares at the rung price. Now flip to selling weekly calls. Real data: 5 assignments in 12 weeks across the ladder.
The real risk
Stock crashes well below
You still buy at your strike — but the stock is now worth less. Premiums help, but you must be willing to hold. That's why min/max should be conservative.
06
Real numbers from 12 weeks of trading
These are summed directly from the trade log — no estimates, no Black-Scholes guesses. Premiums shown are what actually hit the account.
- Total option premium collected (Feb 3 → Apr 29, 86 days)$6,744
- Average per week~$548
- Capital reserved (5 rungs × $6k–$8k)$35,000
- Period return (premium only, 86 days)19.3%
- Annualized run-rate (premium only)~82%
- Closed share cycles in the period2 (one −$500, one $0)
- Active assignments still held at end$70, $75, $80 (3 rungs)
The asterisk: the ~82% annualized figure is premium only. Three of the five rungs are currently assigned (holding shares at $70/$75/$80). Until those get called away, some of the "return" is paper — the actual cash result depends on where SLV is when those shares eventually get sold. The premium income, however, is real and banked.
Fast cadence + multiple rungs is what drives the high run-rate. A single monthly put on a single strike would produce a fraction of this.
07
Quick FAQ
Why weekly contracts instead of monthly?+
Time decay accelerates in the last week of an option's life. Selling 4 weekly puts collects more total premium than one 4-week put at the same strike. The real ladder runs almost entirely on weeklies.
What does "rolled" actually mean?+
When a put you sold is about to be assigned (stock dropped below strike near expiry), you buy it back and immediately sell a new put further out in time, often for net positive credit. You avoid taking the shares that week and collect more premium. In the data, most puts are rolled rather than assigned.
What if the stock skyrockets and I never get filled?+
You miss the rally — but you keep every premium. In the data this happened: many $70/$75/$80 puts simply expired worthless when SLV was above them. The premium was the entire trade.
What if SLV crashes through every rung at once?+
You end up owning shares at every rung, with an average cost near the middle of your range. That's why $60 was the bottom rung — it must be a price you'd genuinely be excited to own silver at. The 3 currently-assigned rungs ($70/$75/$80) are exactly this scenario partially playing out — handled by selling calls until the price recovers.
How many rungs should be active at once?+
In the real data, usually 2–3 puts open simultaneously (the rungs closest to current SLV price). The far rungs sit dormant as catastrophe insurance — ready to fill if there's a crash, but not actively selling premium.
Reality check
The numbers above are from one trader's real SLV ladder over a 12-week stretch where SLV stayed mostly inside its range. A sustained move below $60 would change the picture significantly — you'd still collect premium, but you'd also be sitting on losses on shares assigned at higher rungs. Pick rungs at prices you genuinely believe in, never sell more contracts than you have cash to back, and treat the run-rate as "what happened recently," not "what will happen next."