What is the wheel score used in the OptionIncomeTools wheel screener?

The wheel score is a 0–100 composite that ranks an underlying for the wheel strategy by combining premium efficiency, liquidity, and assignment-risk-adjusted yield; it is a screening heuristic, not a forecast.

Calculation type: Heuristic score Method version: 2.0 (effective 2026-07-16) Date reviewed: 2026-07-17

Formula

Methodology v2.0 (effective July 16, 2026) — a weighted composite of four sub-scores (each 0–1):
  0.40 × yield_norm — combined CSP+CC annualized yield, capped at 150% APY
  0.25 × liquidity_norm — bid-ask spread + open interest + volume gates score
  0.20 × delta_quality — peaks at 0.27Δ short put (empirical wheel sweet spot), linear decay
  0.15 × iv_regime — full credit at IV ≤ 80%, linear decay to zero at 130% (crash-vol penalty)
Rounded to integer 0–100. Source of truth: /data/wheel-score-methodology.json.

Worked example

SOFI with 42% combined yield, 78 liquidity score, 0.30Δ short put, and 55% IV proxy:
  yield_norm = min(1, 0.42/1.5) = 0.28
  liquidity_norm = 78/100 = 0.78
  delta_quality = max(0, 1 − |0.30−0.27| × 2) = 0.94
  iv_regime = max(0, 1 − max(0, 0.55−0.8)/0.5) = 1.00
  score = round((0.40×0.28 + 0.25×0.78 + 0.20×0.94 + 0.15×1.00) × 100) = 65.

Common misinterpretation

Treating wheel score as a quality score or a prediction of profit. It is a relative ranking inside our screened universe under the current snapshot. A wheel score of 75 today may be 55 tomorrow if implied volatility falls or assignment risk rises.

Limitations

Does not include account-type fit (no naked options in IRA, etc.).
Does not adjust for upcoming earnings or ex-dividend dates — check those separately.
Normalization is relative to our 70-ticker universe, not the entire US options market.

Tools that use this metric

Primary references

Methodology page — full formula + derivation
wheel-score-methodology.json — machine-readable source of truth
wheelScore() in Worker — the actual code that computes production scores

References cite the source institution where the underlying definition or rule is published. OptionIncomeTools does not redefine standardized options terms; it ranks and presents data using widely accepted definitions.

Related glossary entries

Browse the full glossary for related definitions.

Educational only — not investment advice. See the disclaimer and methodology. Material methodology corrections are logged at corrections.