Most wheel traders have a rough sense of what they made last month. "About $800, maybe a bit more." That's not good enough. If you can't calculate your exact return on capital, you can't compare campaigns, you can't identify what's working, and you can't improve. Here are the five metrics every wheel trader should be tracking — and exactly how to calculate them.
What Are the 5 Key Wheel Strategy Profit Metrics?
1. Gross Premium Income
The total face value of all premiums you've received. This is your starting point, but it's not your profit.
Gross Premium = Σ (STO Premium × Contracts × 100)2. Net Premium After Fees
Subtract all commissions, exchange fees, and regulatory fees from gross premium. These add up more than most traders realize — especially if you're running weekly positions across multiple tickers.
Net Premium = Gross Premium − All Fees3. Return on Capital (ROC)
This is the metric that actually matters for comparing campaigns. Dollar profit alone is misleading — a $500 return on $5,000 of capital is far better than a $500 return on $50,000 of capital.
ROC = Net Premium ÷ Capital at Risk × 100%For a CSP, your capital at risk is the strike price × 100 (or × number of contracts if you sold multiple).
4. Holding Period Return
If your campaign included an assignment and eventual share sale, include the share P&L in your total return:
HPR = (Net Premium + Share P&L) ÷ Capital at Risk × 100%5. Annualized Return
Convert your holding period return to an annual equivalent for cross-campaign comparison:
Annualized = HPR × (365 ÷ Holding Days)Important caveat: Annualized returns on short campaigns can look wildly impressive on paper. A 2% return over 8 days annualizes to over 90% — but only if you can replicate it without losses for 52 consecutive weeks. Be realistic when interpreting this number. Read our full guide on why most traders overstate their annualized returns before getting too excited about the figure.
Full Campaign Example With All 5 Metrics
| Metric | Value |
|---|---|
| Capital at Risk | $17,000 |
| Campaign Duration | 84 days |
| Gross Premiums | $1,182 |
| Total Fees | $42 |
| Net Premium | $1,140 |
| Share P&L | +$500 |
| Total Profit | $1,640 |
| Return on Capital | 9.6% |
| Annualized Return | 41.9% |
Want these calculated automatically for every campaign you run? OptionWheelTracker's dashboard does all of this in real time — no formulas, no manual math.