"How much money do I actually need to start the wheel strategy?" This is the question every new wheel trader asks — and the answer is both simpler and more nuanced than most guides admit. Simple, because the math is straightforward. Nuanced, because what you need depends heavily on which stocks you want to wheel, how many positions you want to run simultaneously, and what kind of account you're using.
What Is the Basic Capital Formula for a CSP?
Capital Required = Strike Price × 100 × Number of Contracts
That's your buying power commitment for one cash-secured put. If you want to sell a single CSP on AMD at a $150 strike, you need $15,000 in available cash or margin. This money isn't lost — it's held as collateral against potential assignment — but it is unavailable for other trades while the position is open.
Capital Requirements by Popular Wheel Tickers
| Ticker | Approximate Price | 1 CSP (1 contract) | 2 CSPs (2 contracts) |
|---|---|---|---|
| Ford (F) | ~$12 | $1,200 | $2,400 |
| Intel (INTC) | ~$25 | $2,500 | $5,000 |
| Bank of America (BAC) | ~$38 | $3,800 | $7,600 |
| AMD | ~$155 | $15,500 | $31,000 |
| Apple (AAPL) | ~$175 | $17,500 | $35,000 |
| Microsoft (MSFT) | ~$410 | $41,000 | $82,000 |
What Is the Realistic Minimum to Start?
For a single campaign on a mid-priced stock ($30-$80 range), $5,000-$10,000 gives you enough to sell one contract with reserve capital for managing potential assignment. If you want to run 3-5 concurrent campaigns across different sectors — which smooths your returns considerably — a starting point of $30,000-$50,000 is more appropriate. For high-priced tech stocks like AAPL or MSFT, you'll need considerably more per position.
A practical starter approach: choose 2-3 tickers in the $30-$60 range, run one contract each, and build from there as your account grows and your comfort level with the strategy increases.
Cash Account vs Margin: Which Requires More Capital?
In a cash account, you need the full strike × 100 in available cash. In a margin account, your broker may only require 20-30% of that amount as a buying power reduction, with the rest covered by your margin credit. The lower capital commitment is appealing, but we strongly recommend starting the wheel strategy in a cash account. The discipline of needing full collateral prevents over-leveraging, and cash accounts have no margin call risk that could force you out of a position at the worst possible moment.