So this is my first attempt at running the wheel. I’ve put 1100 gbp in my account and will try making a cash secured put. My feeling of the charts is that … I might get assigned! So perhaps lets start a little cautious.
My First Options Trade: Selling a Put on Ford (F) – Will the Price Go Down?
The stock’s currently trading at $9.85, with a high of $9.86 and a low of $9.84. I see it’s been bouncing around between $9.80 and $9.93 today, which feels pretty tight. The Bollinger Bands (BB 20 2) are showing the price is near the lower band at $9.80, and the upper band is at $9.93. From what I’ve read, when the price is near the lower band, it might be a sign it’s oversold and could bounce back up soon. The 9-period Moving Average (MA 9) is at $9.87, just above the current price, and the Simple Moving Average (SMA 9) is at $9.90, which the price seems to be struggling to break through. Volume is at 36.69K for this 5-minute candle, which doesn’t seem super high to me, but I’m not totally sure what’s normal yet.
The Relative Strength Index (RSI 14) on this chart is at 42.26, which is below the neutral 50 level but not quite in oversold territory (below 30). To me, this suggests the stock isn’t screaming “buy” yet, but it’s not crazy overbought either. It feels like it might be stabilizing or could dip a bit more before bouncing. Over the next 3 days, I think there’s a decent chance—maybe around 40%—that the price could dip a little lower, possibly testing that $9.80 level again, especially if volume stays low and there’s no big push to break above the MA at $9.87. But if it holds here and volume picks up, I could see it climbing back toward $9.90 or even $9.93.
Now, let’s zoom out to the daily chart to get a bigger picture for the next 10 days. This chart goes back to September 2024, and I can see Ford’s stock has been pretty volatile. It peaked around $10.50 in late October 2024, dropped to about $9.50 in early February 2025, and now it’s sitting at $9.86 as of March 31, 2025. The Bollinger Bands (BB 20 2) show the price is right around the middle, with the upper band at $10.30 and the lower band at $9.48. The 9-period MA is at $9.90, and the SMA 9 is also at $9.90, so the price is just below these levels, which might act as resistance.
The RSI (14) on the daily chart is at 26.44, which is pretty low and in oversold territory (below 30). From what I’ve learned, this could mean the stock is due for a bounce soon, as it’s been sold off a lot recently. Volume has been spiking on down days, with 1.267M shares traded on some of those red candles, which tells me there’s been some heavy selling pressure. But the low RSI makes me think the selling might be overdone, and we could see some buyers step in.
For the next 10 days, I’m thinking there’s a lower chance of the price going down much further—maybe around 30%. The oversold RSI suggests a bounce is more likely, and the price might try to climb back toward the MA at $9.90 or even the upper Bollinger Band at $10.30 if momentum picks up. However, if it breaks below $9.48 (the lower Bollinger Band), that could signal more downside, possibly toward $9.20 or so, but I don’t think that’s the most likely scenario right now.
My Prediction: Over the next 3 days, I’d say there’s about a 40% chance Ford’s stock price dips a bit, maybe to $9.80 or slightly lower, based on the intraday chart. But over 10 days, I think the odds of a significant drop are lower, around 30%, because of the oversold RSI on the daily chart. I’m leaning toward the stock either holding steady or bouncing up a bit, maybe to $9.90 or $10.00, unless something big happens to push it down further.
Notes on the Analysis:
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The 5-minute chart shows short-term price action, where the stock is near the lower Bollinger Band and has an RSI of 42.26, suggesting a potential small dip or consolidation before a possible bounce.
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The daily chart’s RSI of 26.44 indicates the stock is oversold, which often precedes a price increase, reducing the likelihood of a significant drop over 10 days.
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The probabilities (40% for 3 days, 30% for 10 days) are rough estimates based on the technical indicators and price position relative to key levels.
So this was the order I was looking at yesterday. The stock price is sitting at $10.02 USD, up a tiny 0.08% today, which is basically flat. I’m looking at a strike which is just 2 days away. The strike price I’m eyeing is $9.35, and the put at that strike has a last price of $0.03. Let’s dig into this screen and figure out what’s going on.
At the top of the options chain, there’s a row with a bunch of metrics: VWAP, Opt Vlm, IV Last, IV / Hist Vol, 52W IV Rank, 52W IV Perc, P/C Int, P/C Vlm, IV Cls, and IV Ch. Here’s what I’m seeing:
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VWAP (Volume Weighted Average Price): $9.607. I think this is the average price of the stock today, weighted by volume. Since the stock is at $10.02, it’s trading above this average, which might mean there’s some buying interest pushing it up.
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Opt Vlm (Option Volume): 19.0K. That’s the total number of option contracts traded today across all strikes and expirations for Ford. Seems decently active, which is good—I don’t want to be stuck in a trade with no liquidity.
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IV Last (Implied Volatility): 47.3%. This is the market’s expectation of how much the stock might move in the future, annualized. So, the market thinks Ford could be pretty volatile—47.3% up or down over a year is a big swing for a stock trading at $10.
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IV / Hist Vol (Implied Volatility vs. Historical Volatility): 146.1%. Historical volatility is the actual past movement of the stock, and this ratio tells me the IV (47.3%) is 146.1% of the historical volatility. That means the market is pricing in more volatility than Ford has actually experienced recently—options might be a bit expensive because of that.
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52W IV Rank: 51. This ranks the current IV against its range over the past year. A rank of 51 means the IV is about average compared to the last 52 weeks—not too high, not too low.
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52W IV Perc (52-Week IV Percentile): 100%. This means the current IV is higher than 100% of the IV readings over the past year. So, options are priced as if Ford is going to be more volatile than it has been at any point in the last 52 weeks. That’s a red flag—maybe I’m not getting a great deal selling this put. The context is a huge swath of US tarrifs coming into effect tomorrow.
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P/C Int (Put/Call Interest): 1.09. This is the ratio of open interest in puts to calls. A ratio above 1 means more people are betting on the stock going down (puts) than up (calls). Not a huge skew, but it leans bearish.
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P/C Vlm (Put/Call Volume): 0.43. This is the ratio of put volume to call volume today. A lower number means more call buying—people are more interested in betting on the stock going up today. That’s a bit more bullish, which might work in my favor if I sell a put.
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IV Cls (IV Close): 45.715%. This is the IV at the close of the last trading session, I think. It’s close to the current IV of 47.3%, so not much change there.
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IV Ch (IV Change): 1.62. The IV has gone up by 1.62 points since the last close. That’s a small increase, but it might mean the put I’m looking at got a bit more expensive today.
Now, let’s zoom in on the options chain itself. I’m looking at the $9.35 strike for puts expiring April 4, 2025. The columns show:
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Calls (Bid, Ask, Last): I’m not buying calls, so I’ll skip this for now.
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Strike: $9.35. This is the price at which I’d have to buy Ford shares if the put buyer exercises the option.
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Puts (Bid, Ask, Last): For the $9.35 put, the bid is $0.03, the ask is $0.04, and the last price it traded at was $0.03. The implied volatility for this specific option is 60.3%, which is higher than the overall IV of 47.3%—this strike is pricing in even more volatility.
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Big Number Under 0.03 (Open Interest): The number below the last price of $0.03 is 10,673. That’s the open interest—the number of contracts still open for this strike and expiration. That’s a lot of contracts, so there’s good liquidity here. I won’t have trouble finding a buyer if I want to close my position later.
If I sell this $9.35 put at the bid price of $0.03, I’d get $0.03 per share. Since each contract covers 100 shares, that’s $0.03 x 100 = $3 per contract. That’s… really low. I was hoping for more premium to make this worth my while. Why is it so low? Well, the strike price of $9.35 is out-of-the-money (OTM)—the stock is at $10.02, so it’s above the strike. The market thinks it’s unlikely the stock will drop below $9.35 in just 2 days, especially since it’s only about 6.7% below the current price ($10.02 – $9.35 = $0.67, and $0.67/$10.02 = 6.7%). Plus, with only 2 days until expiration, there’s not much time for the stock to move that far, so the premium is tiny.
There’s also a “Break Even: US$9.32” mentioned. That’s the breakeven price for the buyer of this put, but since I’m selling, it’s relevant for me to understand my risk. The breakeven is calculated as the strike price ($9.35) minus the premium ($0.03) = $9.32. If the stock falls below $9.32 by expiration, the put buyer starts making money, which means I start losing money. As the seller, I keep the $3 premium no matter what, but if the stock drops below $9.32, I could be assigned the shares at $9.35, and my effective cost basis would be $9.35 – $0.03 = $9.32 per share.
Speaking of assignment, how likely am I to be assigned? Since the stock is at $10.02 and the strike is $9.35, the put is out-of-the-money. For me to be assigned, the stock would need to drop below $9.35 by the close of trading on April 4—again, that’s a 6.7% drop in 2 days. Ford isn’t known for wild swings, and the market indices (S&P 500 at 5614.32, down 0.33%, and NASDAQ Comp at 1739) aren’t showing any major market panic. The high IV (47.3%) and 52W IV Perc (100%) suggest the market is pricing in some risk, but with only 2 days left, I think the odds of a 6.7% drop are pretty low. I’d say my chance of being assigned is maybe 10-15%, but I’m no expert at calculating that exactly. If I were to look at the delta of this option (which isn’t shown here), it’d give me a better sense—delta often approximates the probability of expiring in-the-money.
One thing that’s bugging me is the high IV. With the 52W IV Perc at 100%, I’m selling this put when options are at their most expensive in the last year. That’s not ideal for a seller like me—I’d prefer to sell when IV is low so I’m not taking on as much risk of a big move. If the stock does drop and I get assigned, I’d be okay buying Ford at $9.32 effectively, since I’m starting the wheel and I’m fine owning the stock. But the tiny $3 premium feels like it’s not worth the risk, especially with that high IV.
There’s also a button to “Sell 1 Apr04’25 9.35 Put” for $0.04 (the ask price), which would get me $4 per contract. The bid/ask spread is tight ($0.03 to $0.04), so I could probably get filled at $0.03 or $0.04 easily. But honestly, I’m not sure if this trade makes sense for me right now. I might need to look at a strike closer to the money or an expiration further out to get a better premium.
Here’s my take on the order page for the Ford (F) put option. The stock price is now at $9.94, down 0.9% today, which is a little concerning, but I’m still thinking about selling this put to start the wheel strategy. The put’s last price is $0.03, down 40% from yesterday, which makes sense since the stock price dropped, bringing the strike closer to the money. Let’s break down this order ticket and figure out what I’m looking at.
At the top, I see the details of the option: “F APR 04’25 9.35 Put – FORD MOTOR CO.” The ask is $0.04 with a size of 5,359 contracts, and the bid is $0.03 with a size of 13,686 contracts. The last price it traded at was $0.03, and the size of that trade was 1 contract. The bid/ask spread is still tight at $0.03 to $0.04, which is good—it means I should be able to get filled without too much hassle. Since I’m selling, I’ll likely get the bid price of $0.03, which means $0.03 x 100 shares per contract = $3 per contract. Not a lot, but it’s a start.
On the left side, there’s a small chart showing Ford’s price movement over the last week (1W) and 1 day (1D). It’s a candlestick chart with volume bars at the bottom, and I can see the stock has been trending down slightly over the past few days. The volume bars show some spikes in trading activity, which tells me there’s decent interest in the stock. The chart also has a 9-day Simple Moving Average (SMA) line, which looks like it’s sloping down a bit, confirming the recent downward trend. That makes me a little nervous—my $9.35 strike is now only 5.9% below the current price ($9.94 – $9.35 = $0.59, and $0.59/$9.94 = 5.9%), so the chance of the stock dropping below my strike by tomorrow’s expiration is a bit higher than it was yesterday.
Below the chart, there’s a section labeled “Your Account.” Here’s what it shows:
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Buying Power: 1,100. This is the amount of cash I have available to trade with. Since I’m selling a put, I don’t need to use buying power to place the trade, but I might need it if I get assigned and have to buy the shares.
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Available to Trade: 1,100. Same as buying power, I think—this is what I can use for trades.
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Settled Cash: 1,100. This is the cash that’s fully settled and ready to use. Good to know I’ve got enough liquidity.
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Equity w/Loan: 1,100. This is the total value of my account, including any borrowed funds. Since it matches my cash, I’m not using any margin.
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Initial Margin: 0. Since I’m selling a cash-secured put, I don’t need to borrow money, but I need to have enough cash to cover buying 100 shares at $9.35 if I get assigned. That’d be $9.35 x 100 = $935, which is less than my $1,100, so I’m good.
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Maintenance Margin: 0. This is the amount I’d need to keep in my account to maintain the position. Since it’s 0, I’m not using margin for this trade.
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Position / Avg. Price: 0 / 0. I don’t currently own any Ford shares or have any open options positions on it.
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Open Orders: 0. I don’t have any other orders pending for Ford.
Now, let’s look at the order ticket itself. The “Sell” tab is highlighted in red, which makes sense since I’m selling a put. The fields are set up as follows:
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Quantity: 1. I’m selling 1 contract, which covers 100 shares.
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Order Type: Limit. This means I’m setting a specific price at which I’m willing to sell the put. I could choose “Market” to sell at whatever the current market price is, but with a limit order, I have more control.
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Limit Price: 0.03. This is the price I’m willing to sell the put for, matching the current bid price. If I set it higher, like $0.04 (the ask), I might not get filled as quickly, since buyers are only offering $0.03 right now.
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Time-in-Force: Day. This means my order will only be active for today. If it doesn’t get filled by the end of the trading session, it’ll be canceled. I could choose “GTC” (Good ‘Til Canceled) if I wanted it to stay open longer, but since expiration is tomorrow, I’m fine with “Day.”
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All or None: Not checked. This means my order can be partially filled if there aren’t enough buyers for the full quantity. Since I’m only selling 1 contract, this doesn’t really matter.
There’s also a “Price Management Algo” checkbox, but it’s not selected. I think that’s an advanced feature where IB tries to optimize the price for me, but I’ll keep it simple for my first trade.
At the bottom, there are two buttons: “Sell Order” in red and “Preview” in white. There’s also a note saying “Notice the update? Give feedback,” which I guess means IB recently updated their interface. And it says “Market Data Powered by GFIS,” which must be the data provider they’re using.
How to Place the Order
To place this order, it’s pretty straightforward. I’ve already set the quantity to 1, the order type to Limit, the limit price to $0.03, and the time-in-force to Day. Everything looks good, so I can either click “Preview” to double-check the details or just hit “Sell Order” to submit it right away. I’m a bit cautious since this is my first options trade, so I’ll click “Preview” first.
When I click “Preview,” IB will show me a summary of the trade, including any commissions or fees. For a trade this small, the commission is probably going to be around $1 or less—IB’s fees are pretty low, usually $0.65 per contract with a $1 minimum per order. The preview will also show the margin impact, which should be minimal since I’m selling a cash-secured put and have enough cash to cover the assignment ($935). If everything looks good, I’ll click “Submit” on the preview screen to place the order.
What Happens When I Proceed
Once I submit the order, it’ll go to the market as a limit order to sell 1 April 4, 2025, $9.35 put at $0.03. Since the current bid is $0.03 with a size of 13,686 contracts, there’s a good chance my order will get filled quickly—there are plenty of buyers at that price. If it fills, I’ll immediately receive the premium: $0.03 x 100 shares = $3, minus the commission (let’s say $1), so I’ll net about $2 in my account.
At that point, I’ve sold the put, and I’m obligated to buy 100 shares of Ford at $9.35 if the stock price is below $9.35 at expiration tomorrow (April 4, 2025). Since the stock is at $9.94 right now, it would need to drop 5.9% in one day for me to be assigned. That’s not impossible, especially with the stock trending down, but I still think it’s unlikely—maybe a 15-20% chance, based on how far out-of-the-money the strike is.
If the stock stays above $9.35 by the close of trading tomorrow, the put will expire worthless, and I keep the $3 premium (minus commission) as profit. That’s the ideal outcome for me as a put seller—I make a small profit without having to buy the shares. If the stock does drop below $9.35, I’ll be assigned, and I’ll have to buy 100 shares at $9.35, costing me $935. My account has $1,100, so I can cover that, and my effective cost basis will be $9.35 – $0.03 = $9.32 per share after accounting for the premium. Then I’d own the shares and could start selling covered calls to continue the wheel strategy.
One thing I’m keeping an eye on is the stock’s downward trend. If it keeps dropping today, I might want to wait and see if I can get a better premium by selling a put at a higher strike or a later expiration. But for now, I’m ready to place this order and see how it goes. It’s a small trade, so even if I get assigned, I’m okay with owning Ford at $9.32 effectively—it’s a stock I’m happy to hold as part of the wheel.
First warning
Second warning
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