There's no shortage of content about how to start a wheel strategy campaign. The harder and more important question — when do you end one? Most traders either hold campaigns far too long out of stubbornness or close them too early out of impatience. Neither is based on a framework. Here are seven specific exit triggers that will help you make disciplined, data-driven close decisions every time.
Exit Trigger 1: The Fundamental Thesis Has Changed
You started the campaign because you believed in the company. If that belief is no longer supported by the evidence — declining revenue, management exodus, broken business model, or repeated earnings misses — the thesis is gone. Check MoneySense.ai for the latest 10-K and 10-Q analysis. If you wouldn't buy the stock at today's price, you shouldn't be running the wheel on it. Exit the campaign cleanly.
Exit Trigger 2: Position Size Has Grown Too Large
If a single campaign now represents more than 20% of your total portfolio — whether because you added shares during recovery attempts or the stock's price declined while everything else rose — you've exceeded a healthy concentration level. Reduce the position regardless of your thesis strength. Concentration risk doesn't care about your conviction level.
Exit Trigger 3: A Significantly Better Opportunity Exists
Capital is finite. If the capital tied up in a mediocre wheel campaign could earn 40% more ROC on a different ticker with comparable risk, redeployment is the right choice. Use your OptionWheelTracker dashboard to compare current ROC across all active campaigns and make allocation decisions with real numbers.
Exit Trigger 4: Tax-Loss Harvesting Window Is Open
Near year-end, an unrealized loss becomes a potential tax asset. Closing a losing campaign before December 31 lets you realize a capital loss that can offset gains from other positions. After the 31-day wash sale window, you can re-enter the wheel at lower strikes with a clean cost basis. Often, the tax benefit of this move exceeds what continued premium collection would have earned over the same period.
Exit Trigger 5: Time-to-Recovery Calculation Fails
For any underwater campaign, estimate how many months of covered call premium at current IV levels would be required to get your ACB back to break-even. If that number exceeds 12 months, the capital is almost certainly better redeployed elsewhere. Read our full recovery strategy guide before making this decision.
Exit Trigger 6: Your Target ROC Has Been Achieved
Set a target return on capital for every campaign you open. When you hit it, take the win. Staying in a position past your target just to squeeze out more premium increases your risk without proportionally increasing your expected return. Discipline in taking profits is as important as discipline in cutting losses.
Exit Trigger 7: Systemic Risk Has Changed Your Macro View
Entering a recession, a major sector disruption, or significant geopolitical volatility can change the risk profile of every campaign simultaneously. Having a predetermined threshold for reducing overall wheel exposure — not just trimming individual positions — prevents the "frog in boiling water" problem of slowly watching your portfolio deteriorate without ever making a conscious decision to reduce risk.