Monthly income exceeding $1,000 from a single stock position isn't just theoretical—it's entirely achievable through systematic application of the continuous wheel strategy. The key lies in recognizing high-premium opportunities like earnings weeks and positioning yourself to capture outsized income from both covered calls and cash-secured puts simultaneously.
Marvell Technology (MRVL) provided a perfect example during its February 2023 earnings week. With 300 shares already owned through previous put assignments, the position was perfectly structured to capitalize on the volatility expansion that accompanies earnings announcements. Selling 3 covered call contracts and 1 cash-secured put generated $630 in premium from a single week's activity.
This article walks through the complete transaction process: analyzing the earnings week opportunity, selecting appropriate strikes on both the call and put sides, executing trades through Think-or-Swim paper trading account, and logging every transaction in MyATMM for accurate cost basis tracking. The systematic approach demonstrates how playing both sides of the market creates guaranteed wins while building positions through strategic dollar cost averaging.
The continuous wheel strategy creates monthly income by systematically playing both sides of an underlying stock through covered calls and cash-secured puts. Unlike traditional directional trading, this approach profits regardless of whether the stock moves up, down, or sideways.
Traditional wheel strategy involves selling cash-secured puts until assignment, then selling covered calls on the acquired shares. The continuous wheel enhances this by selling both puts and calls simultaneously whenever you have the positioning to do so:
When stock price trends downward, put assignments accumulate shares at progressively lower prices. This natural dollar cost averaging reduces your overall cost basis, making future covered calls safer even when sold at-the-money or slightly below your average cost.
In the MRVL example, the trader had accumulated 300 shares through multiple put assignments over preceding weeks. Each assignment occurred at different price points, creating a blended cost basis below the highest purchase price. This averaging effect means the current position remains profitable even if some individual assignments showed paper losses.
Rather than deploying large capital to purchase hundreds of shares upfront, the continuous wheel builds positions organically through put assignments. Each week, you decide whether to sell another put based on strike price, premium available, and your willingness to own more shares at that level.
This gradual accumulation approach offers several advantages:
Earnings announcements create temporary volatility expansion that dramatically increases option premiums. This premium inflation represents the market pricing in uncertainty about the company's results and guidance. For option sellers with defined-risk strategies, this creates exceptional income opportunities.
Several factors combine to boost option premiums during earnings periods:
Marvell Technology scheduled earnings for the week, creating the ideal environment for premium collection. The trader's existing position provided perfect structure for bilateral trading:
| Position Component | Status |
|---|---|
| Shares Owned | 300 shares (accumulated through prior put assignments) |
| Covered Call Capacity | 3 contracts (100 shares each) |
| Available Buying Power | Sufficient for 1 cash-secured put contract |
| Cost Basis | Premium-adjusted cost basis below current market price |
This positioning meant the trader could capitalize on earnings week premium expansion on both the call side (covering existing shares) and the put side (potential share accumulation at attractive levels).
The earnings week provided "big juicy premiums" as described in the video. While specific strike prices and premiums vary based on when during the day orders are placed, the key insight is that premiums during earnings weeks often run 50-150% higher than normal weekly expirations on the same stock.
This premium expansion means you're essentially being paid extra to take on the same structural position you'd be willing to hold anyway. If you're comfortable owning MRVL shares at a certain price point, getting paid substantially more to accept that obligation during earnings week represents pure additional income for identical risk.
Converting strategy concepts into actual trades requires attention to execution details. Here's the complete breakdown of the MRVL earnings week transactions.
With 300 shares in the account, selling 3 covered call contracts maximizes premium collection while maintaining full share coverage:
Transaction Type: Sell to Open, Call Options
Underlying: MRVL (Marvell Technology)
Contracts: 3 (covering 300 shares)
Strike Price: $45.00
Expiration: March 3, 2023
Limit Order: $1.35 per share
Fill Price: $1.71 per share
Execution Time: One minute after market open
Total Premium: $513.00 (3 contracts × 100 shares × $1.71)
The key execution highlight: the limit order was set at $1.35, but the trade filled at $1.71 within one minute of market open. This $0.36 per share improvement added $108 in unexpected premium ($0.36 × 300 shares), demonstrating how earnings week volatility can work in your favor even on fill quality.
With available buying power for one additional contract, selling an at-the-money put creates income while accepting potential share accumulation:
Transaction Type: Sell to Open, Put Option
Underlying: MRVL (Marvell Technology)
Contracts: 1
Strike Price: $43.50
Expiration: March 3, 2023
Initial Limit Order: $1.64 (not filled)
Adjusted Limit Order: $1.17
Fill Price: $1.17 per share
Total Premium: $117.00 (1 contract × 100 shares × $1.17)
Buying Power Required: $4,350 (strike price × 100)
The cash-secured put execution required attention and adjustment. The initial $1.64 limit order didn't fill by 9:10 AM, prompting the trader to reassess. Stock price had already risen into the $44-$45 range by that point, pushing at-the-money premium lower. Adjusting the limit to $1.17 secured immediate execution, demonstrating the importance of monitoring orders during fast-moving earnings week opens.
The two trades together create the bilateral wheel position:
| Component | Premium Collected | Commitment |
|---|---|---|
| 3 Covered Calls ($45 strike) | $513.00 | Sell 300 shares if MRVL > $45 by March 3 |
| 1 Cash-Secured Put ($43.50 strike) | $117.00 | Buy 100 shares if MRVL < $43.50 by March 3 |
| Total | $630.00 | One side guaranteed to expire worthless |
The beauty of this structure: if MRVL finishes between $43.50 and $45.00, both positions expire worthless and the full $630 premium is retained. If MRVL exceeds $45, shares are called away but premium is still kept. If MRVL drops below $43.50, 100 additional shares are acquired at an effective cost of $42.33 ($43.50 strike minus $1.17 premium), and premium is still kept.
Paper trading accounts typically simulate real-world fees and commissions. The MRVL transactions included:
Net premium after all costs: $627.36 ($630.00 - $2.64), representing the actual cashflow improvement to the account.
Collecting premium is only half the equation—accurate tracking determines whether you truly understand your position profitability and can make informed decisions going forward.
Without systematic transaction logging, several critical metrics become impossible to calculate accurately:
The platform provides a structured process for logging each transaction immediately after execution:
Filter the cost basis view to show only positions, revealing all current holdings and active option contracts. For MRVL, this displays the 300 shares held in three separate stock positions from prior put assignments, plus any existing open option positions.
Create two new draft positions corresponding to the just-executed trades:
Clicking save on each draft position moves them to the proposed records section. These are active positions that affect your proposed cost basis and buying power but haven't yet settled into the permanent transaction history.
From proposed records, move both transactions down into the permanent transaction history. This records the exact date, premium received, and all fees. The permanent history creates your audit trail for tax purposes and performance verification.
With transactions logged, MyATMM automatically updates key metrics:
| Metric | Value |
|---|---|
| Shares Owned | 300 |
| Current Stock Price | $44.31 (as of logging time) |
| Simple Cost Basis | $45.00 per share |
| Unrealized Loss (Simple) | -$207.00 |
| Premium-Adjusted Cost Basis | $38.87 per share |
| Proposed Cost Basis (if put assigned) | $44.63 per share |
The most important insight from this data: while simple cost basis shows $45.00 (average share purchase price), the premium-adjusted cost basis of $38.87 reveals the true breakeven point. The $6.13 difference represents cumulative premium collected over the position's lifetime, dramatically improving the real profitability picture.
The dashboard's premium tab reveals monthly income generation consistency. For the MRVL position during this period:
The $630 addition pushed February's total above $1,000, demonstrating how a single earnings week can contribute substantially to monthly income goals. Extrapolating forward, if similar premiums can be collected weekly, monthly income approaches or exceeds $2,500+ on this single ticker.
A single $630 weekly premium collection demonstrates the strategy's potential, but building sustainable $1,000+ monthly income requires understanding the scaling factors and execution consistency.
Breaking down the monthly income calculation reveals what's needed:
The MRVL earnings week trade generated $630—nearly three times the weekly requirement. However, earnings weeks occur quarterly (four times per year), not weekly. Normal weeks generate substantially lower premiums. The key to consistent $1,000+ monthly income lies in combining multiple approaches:
Rather than relying on one stock, deploy the wheel strategy across 3-5 different underlying stocks. This diversifies premium sources and ensures that earnings weeks are staggered throughout each month. When one ticker has normal premium, another might be experiencing an earnings volatility spike.
The MRVL example used 300 shares generating 3 covered call contracts. Scaling to 600-900 shares would proportionally increase covered call premium while maintaining identical percentage returns. Similarly, selling 2-3 cash-secured put contracts instead of just one multiplies put-side income.
Maintain a calendar tracking earnings dates for your selected stocks. This allows you to anticipate high-premium weeks and potentially adjust position sizing to capture maximum income during those periods. The planning also helps you avoid being surprised by binary events.
Rather than withdrawing collected premium, reinvest it into acquiring additional shares or increasing buying power for more cash-secured puts. This compounds your income-generating capacity over time, with each month's premium enabling larger positions the following month.
Based on the MRVL results, here's a conservative projection for monthly income sustainability:
| Week Type | Frequency | Premium (3 calls + 1 put) |
|---|---|---|
| Earnings Week | 1 week per quarter | $630 |
| Normal Weeks | 11 weeks per quarter | $250 (conservative estimate) |
| Quarterly Total | 12 weeks | $3,380 |
| Monthly Average | — | $1,127 |
This projection assumes maintaining the same 300-share position size. Scaling to 600 shares would approximately double these numbers, pushing monthly income toward $2,000+.
To generate $1,000+ monthly on a single ticker like MRVL requires understanding the capital commitment:
The annualized return calculation: $1,127 per month × 12 months = $13,524 annual income on $17,850 at risk, representing approximately 76% return. This exceptional return comes from aggressive weekly options trading and assumes consistent execution without significant adverse price movements.
High-income strategies naturally carry corresponding risks. Understanding and managing those risks determines whether the continuous wheel produces sustainable income or eventual losses.
The most significant risk is substantial stock price decline. While premium collection reduces cost basis, sharp drops can create unrealized losses that exceed cumulative premium collected. In the MRVL example, if the stock dropped from $44 to $30, the 300-share position would show ($44 - $30) × 300 = $4,200 unrealized loss.
Even with the $38.87 premium-adjusted cost basis, a drop to $30 would create a ($38.87 - $30.00) × 300 = $2,661 true economic loss that would require months of additional premium collection to overcome.
The continuous wheel works best on fundamentally sound companies you'd be comfortable owning long-term at various price points. Marvell Technology, a semiconductor company with real products and revenue, represents more appropriate underlying selection than speculative stocks with no earnings or questionable business models.
When covered calls get assigned, you're forced to sell shares at the strike price. If those shares have cost basis below the strike, this creates capital gains and closes the position. While profitable, it ends your premium generation machine on that ticker.
This risk is actually a "good problem"—you made money on both the stock appreciation and the premium collected. The challenge becomes finding a new ticker to redeploy capital into for continued income generation.
Select covered call strikes based on your willingness to sell at that price. If you want to maintain the position long-term, sell calls out-of-the-money at strikes representing meaningful profit. If you're comfortable letting shares go, at-the-money or even slightly in-the-money strikes generate more premium.
Deploying too much capital into a single stock creates concentration risk. If MRVL encounters company-specific problems (product failure, accounting issues, management changes), a single bad news event could crater the stock regardless of overall market conditions.
Limit any single ticker to 10-15% of your options trading capital. Spread the wheel strategy across 5-8 different stocks in different sectors. This diversification ensures that problems with one company don't destroy your entire income stream.
Forgetting to roll positions, missing expirations, or failing to log transactions creates both opportunity cost and tracking errors. These operational mistakes can be more damaging than market risk over long time periods.
Establish weekly routines: review all positions every Friday after market close, set calendar reminders for expiration dates, log every transaction within 24 hours of execution, reconcile account balances monthly. MyATMM's structured workflow makes this systematic approach practical and sustainable.
Passive monthly income exceeding $1,000 from option premium isn't a fantasy—it's the mathematical result of systematic continuous wheel strategy execution. The MRVL earnings week example demonstrated collecting $630 from a single week's activity on just 300 shares, proving that meaningful income is achievable without enormous capital or complex strategies.
The continuous wheel's power lies in its bilateral structure. By playing both the call side and put side simultaneously, you create positions where at least one side wins regardless of stock price direction. The $630 premium was guaranteed on at least half the position before the trade was even placed, with potential to keep all of it if price finished between the strikes.
Earnings weeks provide exceptional opportunities for premium expansion. The same strikes that might generate $150 premium during normal weeks can produce $400-$600 during earnings volatility. Building your position before earnings allows you to capture this enhanced income without taking additional structural risk beyond what you'd accept in normal trading.
Position building through put assignments creates natural dollar cost averaging. Rather than buying all shares at one price, assignments spread purchases across multiple price points over weeks and months. This averaging effect reduces the impact of poorly-timed entries and creates lower blended cost basis that makes future trading safer and more profitable.
MyATMM transforms abstract strategy into concrete execution through systematic transaction tracking. Logging every trade reveals premium-adjusted cost basis—the true profitability metric that simple stock charts can't show. Monthly premium totals demonstrate whether you're meeting income goals. Account reconciliation catches errors before they compound into serious problems.
Scaling to consistent $1,000+ monthly income requires combining multiple approaches: running the strategy across several tickers, building positions to 500-1000 shares on selected stocks, timing earnings weeks across your portfolio, and reinvesting premium to expand capacity. Each month's income fuels next month's growth, creating compounding effects over time.
Risk management determines long-term sustainability. Select fundamentally sound companies you'd own long-term. Diversify across multiple tickers to prevent concentration risk. Set up systematic workflows to prevent execution errors. Accept that unrealized losses will occur during downtrends, recognizing that continued premium collection overcomes temporary price weakness.
The strategy documented here isn't theoretical—it's demonstrated through actual paper trading transactions showing real fills, real premiums, and real position management. The same process works in live trading accounts with real capital, creating real monthly cashflow that compounds month after month, year after year.
Start with one or two positions. Execute the four-step weekly workflow: review current positions, execute new trades, log all transactions, analyze updated metrics. Build your skills and confidence through consistent small wins before scaling to larger capital deployment. The monthly income builds gradually but reliably, creating financial flexibility that expands over time.
Options trading involves significant risk and is not suitable for all investors. Selling covered calls limits upside potential if the stock price rises substantially. Selling cash-secured puts obligates you to purchase shares if the stock falls below the strike price, which can result in losses if the stock declines significantly below your cost basis.
Earnings announcements can cause extreme price volatility and gap movements that may result in unexpected assignments or losses. Past premium collection results do not guarantee future income. Market conditions, volatility levels, and stock-specific factors constantly change, affecting the viability and profitability of any options strategy.
This content is for educational purposes only and should not be considered financial advice or a recommendation to trade any specific security. Always consult with a qualified financial advisor before implementing any options trading strategy. Paper trading results do not include the psychological and financial impact of trading with real capital.
MyATMM automatically calculates premium-adjusted cost basis, tracks monthly income totals, and logs every transaction for complete position visibility. Know your true profitability at all times.
Track up to 3 tickers completely free. No credit card required.
Start Tracking Your Monthly Income TodayJoin wheel strategy traders building consistent monthly cashflow