Strategy Source

Creator/Channel: Tom King

Published Date: September 4, 2025

Link: Enhanced Wheel + IPMCC Trade & Portfolio Update!

Trade Setup

This strategy is an “Enhanced Wheel.” It starts by selling a naked put to enter the trade, but if assigned, swaps the physical shares for a highly leveraged, risk-defined synthetic setup. Below is the structure of the final target position (The Protected Synthetic Long + Income Call).

Action (Sell (-)/Buy (+))	Leg	DTE	Strike Price / Delta Target	Width
Buy (+)	Protective Put	~365	20% Below ATM Strike	N/A
Sell (-)	Short Put (Synthetic Leg)	~365	At-The-Money (ATM)	N/A
Buy (+)	Long Call (Synthetic Leg)	~365	At-The-Money (ATM)	N/A
Sell (-)	Short Call (Income Leg)	Weekly	At-The-Money / 1% Extrinsic	N/A

• Total Capital Required: A fraction of the cost of 100 shares (e.g., controlling a $171 stock costs roughly $1,900 in buying power instead of $17,000).
• Execution Context: The video reviews a live portfolio and demonstrates the theoretical setup for initiating new positions on high-quality stocks (like NVDA, PLTR, and HOOD) using technical levels.

Strategy Application

The “Enhanced Wheel + IPMCC” aims to give you the 1-to-1 participation of owning 100 shares of stock, but for a fraction of the capital, with a strictly capped downside, and a weekly income engine attached.

• The Entry (Phase 1): Instead of buying shares outright, start the wheel by selling a 30 DTE cash-secured put. Target the expected move or major technical support zones (like the 100-day moving average, 50-day moving average, or 3 ATR lower band). If the stock stays above your strike, you keep the premium.
• The Conversion (Phase 2): If the market drops and you are assigned the shares, immediately sell the shares to clear up your capital. Replace them by buying a “Synthetic Long.” You do this by buying a LEAP call and selling a LEAP put at the exact same At-The-Money strike, about a year out. This mimics 100 shares of stock and gives you nearly 100 Delta (Strike metric / Directional bias or “probability of success”).
• The Buffer Zone: A naked synthetic long has the same downside risk as holding pure stock (it can go to zero). To fix this, you immediately buy a protective put roughly 20% below your synthetic strike. This strictly caps your downside risk.
• The Income Engine (Phase 3): Now that you own a protected synthetic asset, you write “Income Poor Man’s Covered Calls” (IPMCC) against it. You sell weekly short calls to aggressively harvest Theta (“Time decay” mechanics).
• Dynamic Strike Selection: You dynamically adjust your short calls based on the market. In a bullish trend, sell slightly out-of-the-money or at-the-money. In a bearish trend, sell in-the-money short calls to increase downside protection. The goal is to constantly collect about 1% in extrinsic premium every single week.
• Managing Greeks: The creator notes the importance of keeping the portfolio’s Vega (“Volatility risk” or the impact of implied volatility) exceptionally low compared to the high Theta being harvested, ensuring volatility spikes don’t blow out the account.

Risk Profile

• Capped Downside: Standard stock can go to zero. By purchasing the protective put 20% below your ATM synthetic strike, your maximum structural loss is hard-capped (e.g., risking ~$1,900 total rather than $17,000 on a stock like NVDA).
• Wing Widths: Not detailed in source transcript as traditional vertical spread wings do not apply to this multi-leg synthetic structure.
• Leverage Risk: Because you are paying approximately 1/10th the cost of the actual stock, your leverage is extreme. A 1% move in the underlying stock can translate to a massive percentage swing in your options pricing. Leverage cuts both ways; while the downside is capped, drawdowns happen aggressively.
• Assignment Risk: If the weekly short call is breached and you face early assignment, you must manage the short shares against your synthetic long structure.

Expected Outcome

1. The “Theta Engine” (Your Base Win)

The underlying stock chops sideways or grinds slowly. The short weekly calls expire worthless or are bought back cheaply. You consistently harvest your 1% extrinsic premium target week after week, generating massive yield on your small capital outlay while the long-term synthetic holds its value.

2. The Bullish Rocket

The stock surges rapidly. While your short weekly calls go in-the-money and require you to pay intrinsic value to buy them back or roll them, your synthetic long appreciates 1-to-1 with the stock. Because you used a fraction of the capital, the overall return on capital is vastly superior to a traditional covered call.

3. The Bearish Trap

The underlying stock crashes. Your losses on the synthetic long are strictly stopped out when the stock hits your protective put (your buffer zone). Meanwhile, you are actively selling in-the-money short calls to harvest heavy premium on the way down, mitigating the capped loss.

Management & Exit Triggers

Primary Income Target: Constantly sell weekly calls targeting roughly 1% extrinsic return on the buying power used for the synthetic structure.

Entry Trigger: Sell the initial 30 DTE put when the underlying hits strong technical support (e.g., 3 ATR, 100 SMA).

Assignment Trigger: If assigned on the naked put, immediately liquidate the shares and convert to the synthetic long + protective put structure.